The New Zealand real estate market is set to rebound in 2025, with leading property group Raine & Horne forecasting 5-7% growth.

After a year of stabilisation following a series of rate cuts, the market is showing renewed strength driven by lower mortgage rates, shrinking days on market, and heightened buyer activity from empty nesters and returning ex-pats.

Raine & Horne, with 65 offices across Aotearoa, also highlights the possible impact of FOMO (fear of missing out), which is expected to energise the market further in the year ahead.

“The Reserve Bank’s series of rate cuts—starting with a 25-basis point reduction in August, followed by a 50-point cut in October and another 25 points in November—are now filtering through to the market, prompting buyers and vendors to take action,” said Mr Angus Raine, Executive Chairman of Raine & Horne.

“We’re witnessing increased sales, shorter days on market, and higher attendance at open homes. While these are still early signs, market activity has noticeably picked up momentum since the initial rate cut in August, which bodes well for growth in 2025.” Mr Raine added.

Mr Keith Niederer, Network Manager, Raine & Horne, noted that after a challenging period for New Zealand’s real estate markets, signs of stabilisation are emerging, with several key trends expected to shape the year ahead for various markets.

“Auckland continues to be an attractive market for both buyers and investors, especially as the city’s inner suburbs begin drawing interest from new demographics,” Mr Niederer observed.

“In late November, we auctioned a property in Saint Marys Bay that caught the eye of New Zealand ex-pats based in the United States who are planning to return home.”

Empty nesters to trade down in Tauranga

In the Tauranga district with the region of Bay of Plenty, Mr Niederer noted that increased market activity is prompting more empty nesters to consider trading down, a trend he expects to gain momentum in 2025.

“Many families have lived on a spacious property in a nice street for 30 years, but now they’re looking to scale back and use some of their capital gains to support their adult children,” he explained.

 “The lawns are too big, the hedges need constant trimming—it’s a lot of work. So, they’re thinking, ‘Why not cash out, simplify life, and maybe give the kids a little help along the way?’”

This shift is particularly evident in Central Tauranga’s avenues, where long-time residents of charming older homes on quarter-acre lots are reassessing their needs.

“They no longer want four bedrooms and a large yard to maintain,” Mr Niederer said. “What they’re looking for now is something low-maintenance—a lock-up-and-leave option that allows them the freedom to visit family for a week without worrying about upkeep.”

Mr Niederer adds that older property owners could benefit from the development of two and three-bedroom apartments with lock-up garages in Tauranga city, located just a 5-minute walk from both the beach and the CBD.

Queenstown to attract returning ex-pats with lifestyle appeal in 2025

Mr Niederer said Queenstown is experiencing a surge in activity, driven mainly by returning ex-pats eager to secure their piece of this scenic haven.

“Queenstown’s unique mix of lifestyle appeal and investment potential makes it a prime destination for those returning to New Zealand,” he noted. “With its strong tourism industry and world-class outdoor recreation, it’s an ideal safe haven for many.”

He added that returning ex-pats, particularly from the UK, are drawn by favourable exchange rates.

“They’re returning with British pounds and taking advantage of excellent currency conversion, which helps them invest in Queenstown’s stunning alpine lifestyle—complete with skiing, breathtaking mountains, and vibrant community living.”

Contrarian Christchurch set for growth in 2025

Christchurch is showing plenty of positive signs as 2024 comes to an end, with some properties attracting multiple interest and some buyers seemingly motivated by a ‘fear of missing out’ (FOMO).

However, Mr Christian O’Malley, Franchise Owner Raine & Horne Cashmere, says, “Whilst the sell-through rate under the hammer is around 50%, good quality properties will always attract multiple interest, regardless of the market conditions.

“In my seven years of experience, and more so in most recent years, Christchurch seems to have bucked the trend and has been less impacted by economic conditions. Even when other cities and regions face difficulties, Christchurch maintains its appeal, offering strong opportunities for both buyers and sellers.” 

Mr O’Malley says Christchurch’s affordability compared to other major cities, such as Wellington and Auckland, is a key factor in its market resilience. In October 2024, the median for Christchurch City was $699,000 compared to Auckland City ($1.133 million) and Wellington City ($881,000)^[i].

“Christchurch City’s median house price in October landed at $699,000, only 5% lower than its peak of $730,000 in February 2022, and this despite having an increase in housing stock available compared to previous years” Mr O’Malley says.

“This is a strong sign of the city’s ongoing appeal to buyers, especially those from outside the Christchurch and Canterbury region. Roughly 30% of online portal views now come from outside Christchurch and Canterbury, compared to roughly 10% in 2018.” 

Looking ahead to 2025, Mr O’Malley believes Christchurch is on track for more stable market conditions, but he anticipates an increased number of properties to be listed over January/February 2025.” 

Mr O’Malley also advises property owners should focus on presentation and investment in marketing to attract buyers in the competitive 2025 market.

“Properties within popular school zones, especially those that are tidy, well-presented and offering modern comforts will be in high demand. If you invest a little more in presentation, you will recoup that investment when it comes to selling.”