WELCOME TO THE February 2025
P ub LISH er
Century 21 New Zealand Ltd
CONT r I bu TO r S
Jen Baird
Julius Capilitan
Corelogic NZ
e DITO r I a L e NQ u I r I e S
Century 21 New Zealand +64 9414 6041
a DV er TISING e NQ u I r I e S
Century 21 New Zealand +64 9414 6041
DISCL a IM er
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a ST ea Dy M ar K e T WITH G r OWING CONFID e NC e
BY JEN BAIRD, REINZ CEO
The latest figures from the Real Estate Institute of New Zealand (REINZ) for January 2025 showed some positive signs across the New Zealand property market, tempered with the usual slowness of the holiday period.
“While the numbers predictably show January being a slower month due to the holidays, sales and listings were higher compared to January 2024, and open home volumes were strong across the country with a positive sentiment shown from buyers. ” explains Chief Executive Jen Baird.
As expected during the summer holiday period, sales were up 17.5% (from 3,212 to 3,774) compared to January 2024, and were down month-on-month by 37.6% (from 6,048 to 3,774) across New Zealand compared to December 2024. For New Zealand, excluding Auckland, sales saw a 23.4% year-on-year rise, from 2,318 to 2,861. Notable growth in sales was observed in Marlborough (+62.5%) and West Coast (+47.4%) year-on-year while all regions saw a decrease in sales month-on-month.
When we adjust the sales figures for seasonality, we see that the
year-on-year difference is higher than expected, reflecting a shift in buyer sentiment over the past year, from caution to more confidence,” Baird says.
The median price for New Zealand decreased slightly, down 1.7% from $763,000 to $750,000 year-on-year. Excluding Auckland, the median price increased 0.9% year-on-year, rising from $685,000 to $691,500.
Only eight out of sixteen regions reported an increase in median prices compared to January 2024. Gisborne had the highest increases up 28.2% from $515,000 to $660,000, followed by Nelson with a 25.4% increase from $670,000 to $840,000 – a record for this region.
“January is traditionally a slower month as New Zealand enjoys its holidays. Year-on-year January shows prices holding steady. Buyers are still enjoying the choices on offer
thanks to rising listing numbers and significant levels of property for sale. First home buyers and owner-occupiers are still the largest groups at open homes, with salespeople reporting investor interest in pockets of the country. Holiday spots like Taupo and Nelson are also seeing interest from visitors from other parts of the country,” added Baird.
Overall, listings nationally increased year-on-year by 21.2% from 7,347 to 8,904, the highest level of listings for January since 2015. Excluding Auckland, listings rose by 21.9% compared to January 2024, from 4,886 to 5,956. Northland was the only region that didn’t report an increase in listings compared to last year; the most significant gains were reported in the West Coast (+100%), Otago (+52.4%), and Gisborne (+45.7%).
National inventory levels increased by 18.9% year-on-year and also
ANNUAL MEDIAN PRICE CHANGES
increased by 10.0% compared to December.
“All regions are seeing an increase in stock numbers with Gisborne, Marlborough and Otago leading the way,” adds Baird.
“With vendors being realistic in their price expectations and meeting the market, there is a positive sentiment out there amongst agents. Steady and improving is the feedback, with the next few months looking busier with a strong pipeline of property coming to market.”
In January, there were 263 auctions nationally (7.0% of all sales), an increase from the previous year but a sharp decrease from December, as usually happens
due to the January holidays. The national median days to sell rose by 3 days, to 54 days, compared to the previous year; excluding Auckland, it increased by five, to 54 days.
The House Price Index (HPI) for New Zealand is currently at 3,606, indicating a decrease of 1.4% year-on-year and 0.2% compared to December 2024. Over the past five years, the average annual growth rate of New Zealand’s HPI has been approximately 4.3%. However, it is currently 15.7% lower than its peak in 2021.
Source: REINZ Monthly Property Report 19 February 2025.
WANAKA
W H aT TO e XP e CT
F r OM TH e rb NZ’S OC r D e CISION
BY JULIUS CAPILITAN, C21 FINANCIAL
The Reserve Bank of New Zealand (RBNZ) has delivered its fourth consecutive 50-basis-point (bp) cut, reducing the Official Cash Rate (OCR) from 4.25% to 3.75%. This move aligns with the central bank’s ongoing efforts to stabilise economic growth following last year’s weak GDP data and reflects its confidence that inflation will continue to ease.
Looking ahead, the pace of future rate cuts may slow. Current projections suggest two additional 25bp cuts in April and May, bringing the OCR to 3.25%–likely the floor for this cycle. However, external factors such as global market volatility and potential disruptions from U.S. trade policies could influence how much further rates decline.
INTEREST RATES AND MORTGAGE MARKET IMPLICATIONS
For mortgage borrowers, now is a strategic time to assess rate options. With a 50bp cut to the OCR on the 19th of February, short-term floating rates could be advantageous for the near term. Borrowers may consider:
• Floating until early March , when the latest OCR adjustments filter through to bank rates. - Currently, we have only seen floating,
flexible and testing rates reduced.
• Fixing short-term (six months) to lock in relatively low rates before the RBNZ’s easing cycle nears its end.
• Waiting for further reductions , though long-term fixed rates may not fall significantly from current levels. Julius Capilitan says: "Best we have seen on the market is a 4.99 for two years but are waiting on a share long 4 or 5 year rate".
WHAT THE OCR CUT MEANS FOR HOMEOWNERS AND bUYERS
For borrowers, falling interest rates have already created opportunities to secure more affordable mortgage repayments. Many homeowners have either refinanced or taken short-term fixed rates, hoping to take advantage of further OCR cuts.
Julius Capilitan says: "We’ve seen a trend of borrowers fixing for
shorter terms to benefit from the rate drops, and that strategy has paid off. But as the RBNZ nears the end of its rate-cutting cycle, it’s time to reassess whether locking in a longer-term rate now might be the smarter move."
A recent analysis by bank economists suggests that while further 25bp cuts in April and May are likely, bringing the OCR down to 3.25%, the risk is shifting. While borrowers have enjoyed falling rates for months, the market might be overestimating how low rates will go. Currently, we are able to secure 4.99% fixed for 2 years for our clients.
HOW MUCH LOWER CAN INTEREST RATES GO?
A 3% OCR by the end of 2025 is already priced into financial
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Continued from previous
markets, meaning that banks have factored in further cuts into their lending rates. But, could the RBNZ stop cutting sooner than expected?
• GDP Data: The economy has been weak but more resilient than expected over 2022-23, meaning the RBNZ may not feel as much urgency to keep slashing rates.
• Inflation Risks: While inflation is easing, headline inflation could tick up again in 2025 as global factors shift.
• Global Uncertainty: The U.S. election and potential trade policy shifts could add volatility to global markets, impacting how far interest rates can fall.
FIX NOW OR WAIT? WE CAN HELP YOU DECIDE
Many borrowers are now caught between taking a ‘bird in the hand’ (fixing at today’s lower rates) or waiting for ‘two in the bush’ (potential further cuts). But there’s no one-size-fits-all answer.
Factors to consider:
• How long you plan to stay in your home
• Your financial flexibility to handle future rate movements
• Whether short-term savings outweigh long-term stability There’s also another key risk: if too many borrowers rush to fix their rates at once, wholesale rates could rise, making it harder to secure the lowest possible rate.
At Century 21 Financial , we do all the calculations for you to determine whether locking in now or waiting it out makes the most financial sense based on your personal situation.
Julius Capilitan says: "We take the guesswork out of it. If you're unsure whether to fix or float, let’s chat and make sure you're getting the best rate possible while avoiding potential risks in the market."
S HO u LD yO u
re NOVaT e O r S e LL aS-IS? S e V e N
DVa NTa G e S OF S e LLING WITHO u T re
If you’re planning to move – whether upgrading, downsizing, relocating for a job, or simply seeking a lifestyle change – it’s crucial to consider what truly needs to be done to prepare your property for the market. While the idea of renovating might be tempting, selling your home as-is could be the better option.
Major operational issues, such as a leaking roof, faulty heating system, or outdated electrical and plumbing, must be addressed before listing, as these are legal disclosure requirements. If left unresolved, a home inspection will likely reveal them, potentially leading to a withdrawn offer.
Here are some important points to consider when selling your property:
1. RENOVATION RETURNS MAY NOT bE WORTH IT
Many home improvements do not deliver an immediate financial return. While full kitchen and bathroom renovations add the most value to a property, they are costly and highly disruptive. If these spaces have not been
updated, it might be best to leave them as they are. Instead, focus on maintaining existing features and ensuring the property is in good condition.
2. LIVING IN A RENOVATION ZONE IS STRESSFUL
For those in spacious homes with extra bathrooms and spare rooms, renovations may be manageable. However, for smaller homes, the inconvenience is significantly greater. Unless you are handling all the work yourself, you are also at the mercy of suppliers’ schedules. If you won’t be the one enjoying the upgrades, investing $20,000 in a last-minute kitchen makeover might not be worth it. Simple updates like painting, replacing cabinet doors, and updating handles
can be extremely cost effective and have a high impact.
3. PERSONAL TASTE IS SUb JECTIVE
Buyers have diverse preferences. A prospective homeowner may not see your vision for a space, whether it’s a study, nursery or potential ensuite. Instead of attempting to predict buyers’ tastes, create a neutral space that allows them to imagine their own possibilities.
4. YOU’VE ALREADY DECIDED TO MOVE
Once you’ve made the choice to leave, don’t let sentimental attachments influence your decisions. If you always intended to add a skylight but never did, let it go – your next home may offer better natural lighting or even
floor-to-ceiling windows. The goal is to move forward, not dwell on past home improvement dreams.
5. FIRST IMPRESSIONS START OUTSIDE
No matter how much effort you put into interior updates, they won’t matter if the home’s exterior is uninviting. Prioritise curb appeal by tidying up the front yard, removing clutter like unused bikes, reseeding patchy grass, and creating an inviting entryway. If you choose to invest in an outdoor upgrade, you might consider new patio furniture that you can take with you to your next home.
6. CLEANLINESS TRUMPS
bRAND-NEW FEATURES
A well-maintained home will always appeal more than one with signs of
wear and tear. Prospective buyers are put off by dirty walls, scuffed floors, stained carpets, cracked tiles, and smudged appliances. Your goal is to present a clean, well-kept space that potential buyers can picture themselves living in. If you can’t bring yourself to paint over a sentimental feature - such as the height markings of your children on a doorframe - replace the frame and keep it as a memento.
7. FIT THE MARKET, DON’T OVERDO IT
Luxury additions like pools, home theatres, or built-in bars might suit your lifestyle but you should consider if they align with what buyers are actually seeking.
A family that loves the outdoors might not want a game room, and an investor looking to rent the
property may not see the appeal of a hot tub. Avoid making excessive upgrades that price your home out of the local market – this could lead to financial losses in the long run. While renovations can be worthwhile in some cases, selling as-is will save time, stress and unnecessary expenses. Instead of sinking money into last-minute changes, focus on ensuring the home is well-presented, clean and market ready. By keeping things simple, you can streamline the selling process and maximise your return without the hassle of renovations.
S ub TL e T ur NING POINT FO r P r OP er T y S e LL er S
BY CORELOGIC NZ
New Zealand’s property market is showing early signs of a gentle turnaround, giving resellers a glimmer of renewed leverage after a prolonged downturn.
CoreLogic NZ’s latest Pain & Gain report for Q4 2024 shows the proportion of properties being resold for more than the original purchase price was 91.0%, up from 90.1% in Q3 2024.
However, that’s still low compared to the post-COVID boom when more than 99% of properties typically sold for a profit.
CoreLogic NZ Chief Property Economist Kelvin Davidson said the small rise suggests resale conditions are gradually improving, aligning with broader signs of a market turnaround.
“While profits are down from the peak, most property resellers continue to see gains.
“The latest increase in the frequency of resale profits supports other indicators that the market may have found a floor, largely due to recent mortgage rate falls.
“However, with property values still about 18% below their peak and the overhang of listings keeping buyers in a strong position, selling conditions remain subdued, he said.
REGAINING GROUND
Mr Davidson said while buyers still have the upper hand, resellers may be regaining ground as profits grow.
“In Q4, the typical size of reseller gains ticked up to $289,500 from $279,000 in the third quarter of last year.
“While the figure is still low compared to the peak in late 2021 of $440,000, it’ still larger than anything we saw prior to Q4 2020.
“On the flipside, the median resale loss was unchanged at $55,000 in Q4, remaining within the $50,000–$60,000 range seen over the past two years,” he said.
Mr Davidson added that although these profits are still significant
and losses small, it’s important to acknowledge two extra factors.
“Hold period plays a key role, and even in a downturn, anybody who has owned property for several years will still tend to make a profit. For owner-occupiers it’s not necessarily a cash windfall either. Indeed, most equity will just need to be recycled back into the next purchase.”
HOLDING OUT
In Q4 2024, sellers who resold for a gross profit held their properties for a median of 9 years, up from 8.6 years the previous quarter.
Mr Davidson said this could reflect caution amid softer market conditions, with many choosing to wait for more favourable opportunities.
“In some cases, particularly for investors, a target return strategy has meant holding properties longer due to the slower housing
market over the past 2-3 years.
“However, it may also reflect weaker housing sentiment and greater caution, with owners opting to ride out the current soft patch before testing the market,” he said.
LOSSES EASE
Mr Davidson said resale performance across property types suggested a turning point, with incurred losses starting to ease.
“In the fourth quarter of the year apartment resales incurred a loss on
29.5% of deals, compared to 8.3% for standalone houses.”
“Although the apartment figure clearly remains high, it dropped from 31.8% in the third quarter of last year. Whereas the ‘pain’ percentage of houses fell from 9.1% in Q3,” he said.
FALLING RATES TO bOOST CONFIDENCE
Looking ahead, Mr Davidson expects that lower mortgage rates will push up house prices to some
extent in 2025, which will tend to strengthen the position for property resellers.
“But any turning point for house prices won’t be sudden or strong, and lingering weakness in the labour market alongside an abundance of listings should mean finance-approved buyers continue to see good opportunities,” he concluded.
