New Zealand’s housing market is showing signs of renewed vitality, with fresh data indicating a notable increase in sales activity even as sellers continue to adjust expectations through significant price reductions.
According to property platform Realestate.co.nz, house sellers collectively trimmed their asking prices by $63 million during the first quarter of 2025. This figure reflects the difference between the initial listing prices and the final sale or withdrawal price across thousands of properties. While this is a slight decrease from the $70 million in price reductions seen during the same period in 2024, the number of properties discounted has actually increased — rising from 1,624 in Q1 2024 to 1,686 in Q1 2025.
Realestate.co.nz spokesperson Vanessa Williams explained that the shift suggests a market adjusting to new realities. “We’re seeing vendors enter the market with more realistic price expectations, which means fewer deep cuts are needed once a home is listed,” she said. This trend is also tied to broader market conditions, including decade-high inventory levels and a national downtrend in average asking prices.
The largest regional reductions were seen in the country’s key urban centres, with Auckland experiencing nearly $10 million in collective price cuts, Waikato around $7 million, and Wellington close to $6 million. In contrast, areas such as Wairarapa, Otago, and Hawke’s Bay saw more modest reductions, with sellers trimming an average of just over $24,000 to $26,000 per property.
These price drops serve as important indicators for both buyers and sellers, Williams said. “For sellers, they offer a benchmark on how much negotiation room might be necessary. For buyers, they can highlight potential opportunities for securing a better deal.”
At the same time, sales volumes are picking up sharply. CoreLogic data shows an 11 percent increase in March sales compared to the same month in 2024, reversing a brief dip in February. “March came roaring back to life,” said CoreLogic property economist Kelvin Davidson. “While we’re still just shy of historical norms, sales have been on a consistent upward trend for nearly two years.”
Davidson noted that improved buyer sentiment is being supported by easing interest rates, which are bolstering affordability and restoring confidence in the housing sector. However, despite this resurgence, buyers still hold significant leverage due to the high number of listings on the market.
“There’s plenty of choice out there, which is keeping house value growth relatively modest for now,” Davidson said. He predicts that it may take until the spring or even into 2026 before the market fully clears the surplus of listings.
Still, prices are nudging upward. March saw a 0.5 percent increase in house values, building on a 0.4 percent rise in February. Davidson expects this momentum to continue, with a projected 5 percent rise in house prices by the end of the year.
Investor activity is also beginning to climb, as lower interest rates reduce the financial strain typically associated with rental property purchases. While first-home buyer participation has dipped slightly from record highs, investors are increasingly returning to the market.
One potential headwind for the market could come in the form of debt-to-income (DTI) constraints, especially as banks lower their test rates. Davidson noted that these limits could become more influential in shaping borrowing capacity in the near future.
Overall, with a healthier balance between buyer and seller expectations, a stable rate environment, and rising confidence, the housing market appears to be gradually returning to form — though not without its challenges. -TIN Bureau
