Market Updates

2025 NZ Property & Mortgage Market Review: What Changed, What We Learned, and What’s Next

Jan 24, 2026

House plans in a notebook

2025 was the year the New Zealand housing market started working again.

Not “back to boom times”, and not without caution… but the gears turned more smoothly: more buyers re-engaged, more sellers listed, and the market became more negotiable. At the same time, lending stayed more rules-driven than sentiment-driven, with affordability and bank serviceability remaining front and centre.

Our review covers calendar year 2025 (January–December), using the latest available data through January 2026. We’ll summarise what happened, what we learned, and what the current data suggests could matter most in 2026.

Last updated: 24 January 2026

2025 in 10 bullets

The 2025 story in three forces

Rates moved from pressure to breathing room

2025 wasn’t just “rates fell” - it was “rates fell enough to change behaviour”. The easing cycle filtered into:

  • More willingness to transact

  • A shift in refixing strategies (shorter terms and split structures)

  • More refinancing conversations as the numbers started to work again

If you want a refresher on what the OCR cut meant for borrowers at the time, see:
https://www.newzealandmortgages.co.nz/blog/rbnz-cuts-ocr-to-2-25-what-it-means-for-borrowers

Property activity improved, but the market stayed disciplined

Sales lifted, but buyers still had plenty of choice. That combination tends to produce a market that’s steadier rather than spectacular.

REINZ’s full-year summary is the cleanest snapshot:

  • Sales up 10.3% to 80,655

  • Median price down 0.6% to $775,000

  • Inventory up 5.9% to 33,182

  • New listings up 2.8% to 113,263

  • Median days to sell unchanged at 44 days

Lending stayed rules-driven

Even as rates eased, lending didn’t revert to the “anything goes” era. Most buyers still had to work within:

  • Bank affordability tests (serviceability)

  • Higher scrutiny of expenses and existing commitments

  • Debt-to-income (DTI) settings in the background, limiting high-leverage lending

If you want the plain-English version of how banks look at affordability:
https://www.newzealandmortgages.co.nz/blog/how-banks-assess-mortgage-serviceability-in-new-zealand

2025 property market: what we saw

A market that moved again, without overheating

The headline theme from REINZ was “stabilisation rather than acceleration”.

And by December, the year ended with:

  • 6,644 sales nationally (+8.1% year-on-year)

  • National median price $786,977 (+1.4% year-on-year)

  • Ex-Auckland median $718,000 (+2.1% year-on-year)

  • Auckland median $1,015,000 (+1.5% year-on-year)

  • Median days to sell 39 (down two days year-on-year)

Regional divergence stayed real

One of the more consistent 2025 signals was that regions didn’t move in lockstep. REINZ highlighted stronger outcomes in Southland, Otago and Canterbury over the full year, driven by affordability and the local supply-demand balance.

Values were “flat-ish” depending on the measure

It’s normal to see slight differences between measures:

  • REINZ focuses on sales and price measures (including the HPI)

  • Cotality uses a hedonic index (Home Value Index)

Cotality’s year-end call was that values finished 2025 down 1.0%, with the national median value at $808,430 and still well below the early-2022 peak.

2025 lending and borrower behaviour: what we saw

The refix conversation got smarter

2025 was a year where structure often mattered as much as rate:

  • More borrowers split their loan across multiple terms to manage uncertainty

  • Offsets and revolving credit came back onto the radar as cashflow improved

  • Borrowers started negotiating harder, because competition for good lending picked up

If you’re linking readers into practical next steps, these are strong “Read next” articles:

Mortgage rates: lower than the peak, but not “cheap money” again

By mid-January 2026, advertised “special” rates across banks were commonly clustered around the mid-4s for 1–2 years, with floating typically higher — but the exact level depends heavily on LVR and borrower profile. (A quick snapshot source: https://www.interest.co.nz/borrowing)

If you want to show borrowers a credible “official” view of advertised specials over time, the RBNZ publishes a series for new residential mortgage special rates. (https://www.rbnz.govt.nz/statistics/series/exchange-and-interest-rates/new-residential-mortgage-special-interest-rates)

The policy settings that mattered in 2025

OCR: the big directional tailwind (with conditions)

In November 2025 the RBNZ lowered the OCR to 2.25%. Their message was essentially: future moves depend on the medium-term inflation outlook and how the economy evolves.

This matters for borrowers because it shapes expectations. If people believe rates will keep drifting down, they tend to:

  • Keep terms shorter

  • Split loans more often

  • Avoid locking everything in for long terms at once

DTI: income and existing debt matter more now

DTI restrictions put “speed limits” on high DTI lending:

  • Owner-occupiers: 20% of new lending can be above DTI > 6

  • Investors: 20% of new lending can be above DTI > 7

Translation: even with a strong deposit, your income and existing debt position can still cap what’s possible.

LVR: eased from 1 December 2025

From 1 December 2025:

  • Owner-occupiers: low-deposit share allowed increased to 25% (from 20%)

  • Investors: low-deposit share allowed increased to 10% (from 5%)

This gives banks more flexibility, especially for first-home buyers, but it doesn’t remove the need to service the debt.

The economic backdrop

Inflation re-lifted into late 2025

Stats NZ reported annual CPI inflation at 3.1% in the December 2025 quarter (0.6% quarterly).

For mortgages, the key point is simple: inflation above target makes the RBNZ more cautious about cutting too far, too fast.

Growth stabilised, but confidence stayed patchy

GDP rose 1.1% in the September 2025 quarter (after a 1.0% fall in June), while GDP was down 0.5% over the year to September 2025.

That kind of mixed growth pulse tends to produce a “selective” market: confident buyers act, but few people rush.

What we learned in 2025

Negotiation mattered again

When inventory rises and buyer urgency drops, price becomes only one part of the deal. 2025 buyers often won on:

  • Conditions

  • Settlement timing

  • Inclusions and repairs

  • Price adjustments after due diligence

Structure beat rate-chasing

Many borrowers got better outcomes by focusing on:

  • Splitting terms (some short, some longer)

  • Keeping optionality for future refixes

  • Using offset/revolving credit strategically if cash buffers allowed

If you want to help readers take action, link to your calculators hub:
https://www.newzealandmortgages.co.nz/calculators

Approval strength stayed a competitive advantage

In a stable market, the buyer who can transact cleanly still wins. A strong pre-approval and a clear servicing story remained important throughout 2025.

Useful internal “next step” guide:
https://www.newzealandmortgages.co.nz/blog/the-smart-buyer-s-guide-to-getting-mortgage-approval-in-new-zealand-(2025-edition)

2026 outlook: steady rather than spectacular (base case)

Here’s the base-case reading of the current data as at late January 2026.

Rates: the direction is supportive, but inflation is the watchpoint

The OCR is already much lower than the peak, but inflation has lifted above the target band again.

What would push rates lower faster?

  • Clear evidence inflation is dropping back toward ~2%

  • A weaker-than-expected labour market and demand slowdown

What would keep rates higher for longer?

  • Sticky inflation (especially non-tradables)

  • A faster rebound in spending and housing demand

Property: gradual strengthening is plausible, but lending constraints remain

Cotality’s year-end view was that early 2026 could show signs of growth, helped by lower mortgage rates and a recovering economy — but with supply and listings still a moderating force.

DTI settings also act as a natural speed limit if the market tries to run too hot.

What this means for different borrowers

First-home buyers

What to focus on in 2026:

  • Borrowing capacity (income, expenses, and existing debt) as much as deposit

  • Strong pre-approval and clean documentation

  • Using “choice” in the market to stay disciplined on value

Helpful internal links:

Refixers and refinancers

What to focus on in 2026:

  • Start early (often 60–90 days before rollover) to create options

  • Consider splitting terms if you’re uncertain where rates settle

  • Run the numbers on break fees and switching costs, not just headline rates

Helpful internal links:

Investors

What to focus on in 2026:

  • Cashflow and buffers (especially with employment uncertainty still around)

  • Portfolio leverage (DTI becomes more relevant the more properties you hold)

  • Tax settings that affect your after-cost position

Helpful internal link:

What’s not in the headlines (but should be on your radar)

  • Inflation has lifted back above the top of the target band — that can slow or pause easing expectations even if growth feels underwhelming.

  • Listings and supply remain a key “speed limit” on rapid price growth, even as confidence improves.

  • DTI is quietly changing borrowing dynamics: it’s harder to “stretch” on income, even with a great deposit.

  • LVR easing helps some borrowers at the margin, but it doesn’t override serviceability.

The Final Take

2025 reminded us that the mortgage market can change quickly, but the biggest wins usually come from doing the basics well: understanding what you can comfortably afford, choosing the right structure (not just the lowest headline rate), and keeping enough flexibility to adjust when conditions shift.

Looking into 2026, the base case is steady rather than spectacular — lower rates have created more breathing room, but inflation and lending constraints still act as natural speed limits. That’s not a bad setup for borrowers, as long as you make decisions with a plan rather than a guess.

If you’re buying this year or coming up to a refix, it’s worth getting a second set of eyes on your strategy. Our advisers can help you:

  • Compare refix options (and negotiate where it makes sense)

  • Decide whether to split, float, offset, or keep things simple

  • Check serviceability before you commit to a purchase price

  • Map out a plan that fits your income, risk tolerance, and timeline

If you’d like, get in touch and we’ll walk you through your options.

Deeper reads and sources

For more information take a look at our buyer guides:

Market data and releases

‹ Refixing in 2026: A Decision Framework (Split, Float, or Fix Longer?)

Interest Deductibility & Tax Impact for NZ Investment Property (Post-Reforms) ›

Contact us

Book a free lending scenario review with our team

Senior Mortgage Advisor

Tama Sefuiva

Senior Mortgage Advisor

Tama Sefuiva

Senior Mortgage Advisor

Tama Sefuiva