NZ Housing Market Rebound Begins: Early Signals & Opportunities
- Staircase Financial
- 1 day ago
- 6 min read
ON THE MARKET – December 2025 Edition
A Market Gently Waking Up
For the first time in a long while, the signals coming from the economy, the banks and everyday buyers are starting to all line up at the same time. It is not a boom. It is not even a surge. But it is a clear shift away from the uncertainty that has weighed on the property market for the past three years.
The latest ASB Housing Confidence Survey sums it up neatly: buyers now see conditions as the most favourable in 15 years, thanks to lower mortgage rates, stable prices and a large number of listings giving them choice.
What is different this time is that confidence is returning before competition ramps up. ASB calls this a “pre-recovery sweet spot” the period where buyers retain leverage even though the foundations of recovery are quietly forming underneath.
Our property cycle analysis and business activity suggests we are already in the recovery phase and improving confidence is exactly the kind of environment that typically precedes a boom.
At Staircase however we are already evidencing increasing confidence first hand with a recent surge in sales. We just recorded our best ever November result which was our second biggest month in the company’s 23 year history and we are not even in the boom yet!
Why Confidence Has Turned
Several parts of the economy that were holding buyers back have improved at the same time.
Mortgage rates have fallen meaningfully as inflation has eased. Banks have reduced their test rates, making it easier for buyers to qualify for finance. Job ads have picked up again after two years of weakness.
Businesses say they feel more optimistic about the next 12 months. And after months of waiting, construction activity has finally lifted off its lows, signalling that developers are beginning to unfreeze projects.
Perhaps the biggest psychological shift comes from interest rate expectations. More than half of ASB’s survey respondents thought mortgage rates would keep falling, and they have. After the Reserve Bank’s 50 point cut in October, the cost of borrowing dropped further, confirming what buyers sensed months earlier.
This improvement in confidence does not mean buyers are expecting a rapid rise in house prices.
In fact, ASB notes that price expectations remain modest, mainly because listings are still high across many regions.
That balance, cautious optimism paired with plenty of choice, is what makes the current moment unusually attractive.
Auckland: A Market at the Turning Point
If you look only at the headline numbers, Auckland still appears soft: days to sell remain elevated, inventory is high and volumes remain below long term norms. But these surface indicators always lag the true turning points.
The early cycle recovery phase signals are already showing up.
Open home attendance is lifting, especially in the more affordable western and southern suburbs. Price discounting is narrowing as buyers start to make more confident offers. And access to finance, the one thing that has held back Auckland buyers the most, has improved by more and more rapidly than most people have yet to realise.
Even though national consents have risen, Auckland’s affordable new build pipeline remains thin. Higher building costs and long running infrastructure constraints mean developers cannot profitably produce lower priced homes at scale. Until prices increase we can expect an inadequate new build pipeline which contributes to scarcity which puts inevitable upward pressure on prices.
ASB’s survey results reveal Aucklanders are the most positive buyers in the country, with a net 33% saying now is a good time to purchase, the highest reading since 2010.
People can sense the bottom has been reached, even if official data still looks soft.
Tauranga: An Early Mover
Tauranga continues to behave like one of the earliest movers in this new phase. Activity has lifted steadily rather than dramatically: more viewings, more enquiries and a noticeable reduction in the discounting that sellers were forced to accept earlier in the year.
Although Tauranga’s lifestyle appeal gets most of the attention, the real story is its supply shortage. The region simply is not building enough to match long term population shifts.
Even with the recent rise in national consents, Tauranga’s pipeline remains too small to meet the level of medium term demand coming from families, upgraders and Auckland relocators.
When this region starts warming up before others, it is usually a sign that broader confidence is returning across the North Island. The timing this year fits that pattern well.
Queenstown and Frankton: A Tight Market Tightening Further
Queenstown’s housing market does not wait for national trends. It runs on its own demand cycle, and that cycle has clearly turned.
Vacancy rates in the rental market have fallen to very low levels again. Employers across tourism and services are competing for staff. And activity in the upper price brackets, normally an early sign of renewed confidence, has picked up.
Frankton, which already sits at the centre of Queenstown’s residential market, is seeing the strongest enquiry. Families arriving from Auckland and Wellington are showing particular interest, attracted by a mix of lifestyle, schooling and economic opportunity.
ASB’s national message that buyers feel confident and see now as a good time to buy especially strongly in a market like Queenstown, where supply is permanently constrained and demand can move quickly.
What the ASB Survey Adds to the Big Picture
The most powerful insight from ASB’s November release is not a single statistic, it is the shift in tone. After two years of caution, the mood has finally moved from hesitation to cautious intention.
Three findings stand out:
Buyers believe conditions right now are as attractive as they have been since 2010.
ASB attributes this to high inventory, low prices and lower mortgage rates, a mix that rarely exists for long.
Price expectations are modest, but no longer negative.
The survey shows a small lift in expectations in October as the Reserve Bank cut rates and market activity improved.
Labour market confidence is stabilising.
ASB points out that job security concerns have been a major drag on buyers. With labour demand starting to recover and incomes rising faster than inflation, households are finally feeling safer committing to a mortgage.
Overall, ASB expects “modest” house price growth during 2026 not because demand is weak, but because the surge in listings over the past year will take time to work through.
That creates a rare window where conditions favour buyers before competition returns.
What This Means for Investors and Home Buyers
When you stitch everything together the falling rates, rising confidence, stabilising labour market, easing credit conditions and the supply shortages in key regions, the picture is clear.
The worst is behind us.
The recovery has started forming.
And buyers still hold much of the negotiating power.
This combination does not last long. History shows that once sales volumes turn sharply, prices follow quickly.
We are not at that point yet. But we are close enough that the window for securing property at today’s prices with today’s borrowing conditions is beginning to narrow.
Let's Make the Most of This Window
The signs are clear: the market is shifting, and the early movers will be the ones best positioned to benefit. Whether you’re looking to invest, upgrade, or simply understand what this means for your next move, now is the time to get strategic.
Book a free 1:1 strategy session with our team today to discover your options and to learn what's unfolding in the market right now.
Frequently Asked Questions (FAQ)
Is the New Zealand property market recovering in 2025?
Yes. Early signs of recovery are visible across key regions like Auckland, Tauranga, and Queenstown. Improved buyer sentiment, falling mortgage rates, and easing credit conditions are all contributing to this shift.
Why are buyers feeling more confident right now?
According to the latest ASB Housing Confidence Survey, buyers are encouraged by lower mortgage rates, stable property prices, and increased property listings, giving them more options and negotiating power.
Which regions are leading the recovery?
Tauranga and Queenstown are among the earliest movers, showing increased activity and reduced discounting. Auckland is also turning a corner, particularly in its more affordable suburbs.
What does this mean for property investors?
Investors have a rare window where conditions are favorable - high inventory, lower rates, and low competition. Acting before the market heats up could lead to significant long-term gains.
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