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In December 2024, New Zealand's housing market recorded a 1.8% year-on-year drop in median house prices, reaching USD 775,000 nationally, driven by cautious buyer behavior and anticipation of falling mortgage rates in 2025. Sales activity plummeted by 35.4% month-on-month and 7.7% year-on-year, with a rise in inventory levels (+18.5%) and slower sales timelines (42 days median). Excluding Auckland, median prices increased by 1.4%, with the West Coast and Nelson leading regional growth at 24.3% and 10.6%, respectively. Analysts predict a market revival in 2025, anticipating a 6% price increase fueled by expected interest rate cuts by the Reserve Bank of New Zealand.
In December 2024, New Zealand's housing market experienced a notable slowdown, as reported by the Real Estate Institute of New Zealand (REINZ). The seasonally adjusted median house prices decreased by 1.0% compared to November and by 1.8% from December 2023. This decline is attributed to cautious behavior among potential buyers, many of whom postponed purchasing decisions in anticipation of falling mortgage rates in the upcoming year. Advertisement
Sales activity also saw a significant reduction. Seasonally adjusted figures revealed a 35.4% drop in sales from November and a 7.7% decrease compared to December 2023. REINZ Chief Executive Jen Baird noted an unusually sharp decline in sales during the festive season. She explained that buyers had a wide selection of properties but lacked urgency, expecting future interest rate cuts. This sentiment contributed to the subdued market activity in December.
Year-on-year, the national median house price slightly decreased by 0.6% to USD 775,000. Month-on-month, there was a 1.8% decline from USD 789,000. Excluding Auckland, the median price increased by 1.4% over the year, reaching USD 710,000. Eleven out of sixteen regions reported annual median price increases, with the West Coast experiencing the highest rise of 24.3%, from USD 346,000 to USD 430,000, followed by Nelson with a 10.6% increase, from USD 710,000 to USD 785,000.
New property listings nationwide decreased by 1.3% year-on-year, from 4,828 to 4,767. Excluding Auckland, there was a 1.2% decline, from 3,436 to 3,394. Despite the overall decrease, seven out of fifteen regions saw an increase in listings compared to the previous year, with significant gains in Gisborne (+36.8%), Nelson (+33.1%), and the West Coast (+32.1%).
Inventory levels rose by 18.5% year-on-year to 29,478 properties but decreased by 13.3% from the previous month. The national median number of days to sell a property increased by six days to 42 compared to the previous year. The House Price Index (HPI) stood at 3,610, indicating a 1.1% annual decrease and a 0.7% decline from November 2024. Over the past five years, the average annual growth rate of New Zealand's HPI has been approximately 4.4%, but it remains 15.6% below its peak in 2021.
Looking ahead, a Reuters poll from September 2024 projected a 6% increase in house prices for 2025, driven by anticipated interest rate cuts by the Reserve Bank of New Zealand. Analysts expect that lower mortgage rates will enhance affordability, especially for first-time buyers, potentially revitalizing the housing market in the coming year.
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