2025 is shaping up to be a big year for Kiwi homeowners, buyers, investors, and mortgage holders. With economic shifts, evolving government policies, and new trends, here are my top five predictions.
House prices will continue to rise, but at a slower pace
Property values are forecast to grow by 6–7% this year, driven by lower mortgage rates, limited housing supply, and increasing borrowing capacity among buyers.
While growth won’t match the peaks of the COVID-19 era, it’s expected to follow a steady trajectory similar to 2017–2018, when annual increases ranged between 4–7%.
For homeowners, this continued price appreciation is good news for building equity, while new buyers will face a competitive but manageable market.
Interest Rates Will Stabilise at Lower Levels
Following a series of OCR cuts last year, mortgage rates are expected to stabilise at lower levels; and if I had to guess, it would be for 1–2 year fixed rates to fall between 4.5% and 5% by the end of 2025.
This provides greater certainty for borrowers, offering opportunities for first-home buyers and first-time investors to enter the market with more affordable repayments.
With many mortgage holders currently fixed very short term, 2025 is likely to see borrowers look further out to medium and long term for certainty of rates.
Green mortgages will gain momentum
Sustainable lending is on the rise as banks roll out green mortgage options with incentives like lower interest rates or cashback for purchasing energy-efficient homes or completing eco-friendly upgrades.
With looming sustainability targets, lenders are keen to attract environmentally conscious borrowers. Many of our clients are already leveraging these options to save money on interest and and improve the value of their property in a rising market.
You can check out the options available here.
First-home buyers will benefit from policy changes
Government initiatives to improve housing affordability are starting to yield results.
Expanded access to the First Home Loan scheme, combined with lower interest rates and reduced test servicing requirements, will enable more Kiwis to secure their first home.
For first-home buyers, it’s a great time to get pre-approved and enter the market while prices are still relatively subdued.
Investors will re-enter the market with a broader focus
A steadier outlook for long-term rates and improved borrowing capacity are drawing investors back into the property market.
However, their strategies are shifting, with more exploring commercial real estate and short-term accommodation alongside traditional residential investments.
Regional areas with affordable prices will remain hotspots for investors seeking value, yield and growth.
As we navigate some big changes in 2025, remember that planning ahead and staying informed will help you thrive!
For us the key to success is in having a clear strategy and the right adviser by your side.
We're already having great conversations with new and existing clients who want to set themselves up for success this year.
You can be part of this too - book in with one of our epic advisers below and we'll have a chat, figure out a plan and make it one to remember in the property and financial space.