New Zealand’s housing market is poised for a rebound. A Reuters poll of property analysts predicts home prices will rise about 3.8% in 2025 as the market recovers from three years of declines. Analysts credit a series of interest‑rate cuts by the Reserve Bank – 225 basis points since August 2024, with more easing expected – for reducing mortgage rates by roughly 20%.

Yet the recovery may not deliver genuine affordability. Survey respondents told Reuters that buyers remain hesitant and the rebound is slower than hoped, with prices forecast to climb 6.0% in 2026 and 5.1% in 2027. That means anyone entering the market this year must plan carefully.

The broader cost‑of‑living crisis hasn’t abated. Charitable agencies say the slowing economy has worsened poverty; a Salvation Army report found 400,000 people needed welfare support – the highest number since the 1990s – and food insecurity and homelessness are rising. Rising rents and energy costs have eaten into household budgets.

What can you do? Consider these strategies:

Review your budget carefully and prioritise necessities.
Look at relocating to more affordable regions or smaller towns, where housing costs are lower.
Explore
Read our guide on home loans to understand your options as a borrower.
Negotiate with lenders for lower mortgage rates or consider refinancing while rates are low.
Seek community assistance programmes for food, housing and budgeting support.

Policymakers need to expand housing supply and boost productivity to ease the crisis. Until then, staying informed and being proactive can help you navigate the turbulent housing and cost‑of‑living landscape in 2025.