New Zealand Housing Market Recovery: November 2025 Trends & Insights
- Staircase Financial
- Nov 6
- 4 min read
Updated: Nov 6
ON THE MARKET – November 2025 Edition
Evidence Of The Recovery Taking Root: Confidence and Capital Return to Housing
The latest October housing data confirms what Staircase clients have been seeing on the ground for months, the correction is over, and opportunity is re-emerging.
New Zealand’s housing market has now entered a genuine recovery phase with momentum gathering as cheaper credit, improved affordability, and easing lending rules align to reignite both demand and optimism.
What the Latest Data Tells Us
According to the latest Cotality Housing Chart Pack (October 2025):
National property values have slipped just 0.2 percent year on year, marking the shallowest decline since 2022.
Sales volumes have risen in 27 of the past 29 months, a clear sign of sustained momentum.
Investors are returning, now making up 35.2% of total purchases among multiple property owners (24.4% with a mortgage, plus a further 10.8% with cash only).
Yields have lifted to 3.8 percent nationwide, supported by a stabilising rental market and improving occupancy.
Household mortgage costs are now roughly $550 per month lower than a year ago, thanks to falling mortgage rates and easing test conditions.
This is a recovery built on the fundamentals of affordability, improved credit access and growing confidence.
Rates at Multi Year Lows and Lending Rules Relaxed
The Reserve Bank’s recent 0.5 percent cut to the OCR, taking it to 2.5 percent, has delivered the largest single boost to borrowing capacity in years.
Banks have quickly passed this through, with one and two year fixed rates averaging around 4.49 percent.
This reduction means many buyers who were previously priced out can now qualify for lending.
Combined with the Reserve Bank’s move to ease LVR restrictions from 1 December 2025, credit conditions are now more favourable than at any time since just before the pandemic.
Owner occupiers: Banks will soon be able to approve up to 25 percent of new loans with less than a 20 percent deposit (up from 20 percent).
Investors: Up to 10 percent of new lending can exceed a 70 percent LVR (up from 5 percent).
These shifts expand access to credit without compromising financial stability. With debt to income limits now providing a more precise risk measure, banks can lend more confidently to quality borrowers.
Affordability and Confidence Continue To Improve
The Staircase Affordability Index (SAI) shows mortgage serviceability has improved to its most favourable level since 2019 and in Auckland is similar to the levels seen prior to the last 3 property boom’s.
At current interest rates, the proportion of household income required for repayments has dropped by more than 20 percent since mid 2024, markedly improving affordability.
As affordability improves, confidence and higher sales volumes naturally follow.
First home buyers are entering the market at their strongest pace in years.
Upgraders who postponed moving due to job insecurity or high mortgage rates are now preparing to act and will significantly increase sales volumes.
Investors are back in force, encouraged by improved yields and the return of full mortgage interest deductibility.
This alignment of affordability, confidence, and credit access sets the scene for sustained upward momentum through 2026.
The Staircase View: Twin Engines of Growth
At Staircase, we believe two powerful forces are now driving the next phase of the property cycle being cheap credit and rising confidence.
With interest rates near their trough and lending conditions set to ease further, we expect:
Stronger sales volumes quarter by quarter into 2026.
Upgraders to re-enter the market in significant numbers, boosting demand for quality, family oriented homes.
Double digit price growth to emerge in selected markets such as Auckland and Queenstown once the recovery matures.
Investors to expand portfolios as serviceability and equity positions improve.
These conditions mirror the early stages of previous recovery phases in the property cycle, a period when strategic investors have historically set themselves up to achieve the strongest cyclical long term gains.
Now is the Time to Act
The combination of low interest rates, easing restrictions, and renewed confidence has created the most favourable environment for buyers and investors in several years.
Review your borrowing power under the new lower test rates.
Consider refinancing to take advantage of cheaper fixed terms.
Prepare pre-approvals ahead of the December LVR easing.
Explore high growth regions like Auckland, Tauranga, and Queenstown before prices accelerate.
The recovery is no longer a forecast, it is happening.
Lower mortgage rates, looser lending rules, and rising investor participation are breathing life back into the market.
With affordability improving and confidence spreading, 2026 is shaping up as the year New Zealand’s housing market hits its stride again.
Step forward confidently. Step up with Staircase.
Frequently Asked Questions (FAQ)
What is driving the recovery in New Zealand’s housing market?
The recovery is being fueled by falling mortgage rates, improved affordability, easing lending rules, and renewed buyer confidence. Investor activity is also increasing, contributing to the market rebound.
What are the latest LVR changes from the Reserve Bank?
From 1 December 2025, owner-occupiers can access loans with less than 20% deposit up to 25% of new lending (previously 20%), while investors can now exceed 70% LVR on up to 10% of lending (previously 5%).
How have mortgage rates changed recently?
The Reserve Bank cut the OCR to 2.5%, prompting banks to offer 1- and 2-year fixed rates around 4.49%, significantly improving borrowing power and mortgage affordability.
Is now a good time to invest in property in New Zealand?
Yes, current conditions - low rates, relaxed lending rules, and improving yields - are among the most favourable in years, particularly in growth markets like Auckland, Tauranga, and Queenstown.
What is the Staircase Affordability Index (SAI)?
The SAI measures mortgage serviceability based on income and rates. It shows that affordability has returned to its best level since 2019, especially in Auckland.
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