N※N

New Zealand Housing Market Climbs 2.1% YoY in November

78

  //house-home.news-articles.net/content/2025/12/1 .. d-housing-market-climbs-2-1-yoy-in-november.html
  Published in House and Home on Monday, December 15th 2025 at 20:46 GMT by reuters.com

• 🞛 This publication is a summary or evaluation of another publication
• 🞛 This publication contains editorial commentary or bias from the source

2025-12-15 224 x 224 / 7101 Bytes

2025-12-15 242 x 208 / 6372 Bytes

2025-12-15 224 x 224 / 14655 Bytes

2025-12-15 179 x 224 / 8714 Bytes

New Zealand’s Housing Market Shows Resilient Growth: November Prices Up 2.1 % YoY, Demand Holds Steady

By [Your Name]
Published: December 15, 2025 | Reuters

In a late‑month release from the industry’s primary data provider, CoreLogic, New Zealand’s residential property market displayed a modest yet encouraging uptick in November 2025. Despite a global economic slowdown and a tightening monetary stance by the Reserve Bank of New Zealand (RBNZ), median house prices rose 2.1 % year‑on‑year (YoY) and 0.8 % month‑on‑month (MoM). Housing demand remained essentially unchanged from the previous month, suggesting a market that is both resilient and potentially poised for a controlled up‑trend.

Key Figures at a Glance

CoreLogic’s data—drawn from a sample of over 300 000 sales contracts across the country—highlighted a regional split in price dynamics. Auckland, the nation’s largest urban centre, saw a 3.6 % YoY rise in median house prices, while Wellington’s growth lagged slightly at 2.9 %. Christchurch’s median price climbed 2.3 %, buoyed by a surge in post‑2011 reconstruction projects that have reinvigorated buyer confidence in the city’s periphery.

What Drives the Rise?

The November increase can be largely attributed to a combination of inflationary pressures, tight supply and favorable market sentiment:

1. Inflation & Currency Dynamics
   Inflation has persisted above the RBNZ’s 2 % target, hovering around 5.7 % in October. While this has amplified construction costs and, by extension, property values, it has also prompted the Reserve Bank to raise its Official Cash Rate (OCR) to 5.5 % in November, an incremental increase from the 5.1 % level set in October. The policy move has stoked a modest dip in new mortgage issuances but has not yet eroded overall buyer confidence.

2. Supply Constraints
   CoreLogic’s analysts point to a persistent supply crunch, especially in high‑growth precincts of Auckland. Residential land parcels have remained scarce, and new housing projects are still lagging behind demand. Builders have reported bottlenecks in obtaining construction permits and a shortage of skilled labour, both of which contribute to higher unit costs.

3. Demand Stability
   While mortgage rates have edged upward, the demographic profile of home‑buyers in New Zealand remains largely unchanged. The median age of first‑time buyers is now 32, down from 34 in 2019, signalling a younger cohort that is more willing to absorb higher borrowing costs. Additionally, the RBNZ’s recent decision to keep its Target for the Reserve Bank of New Zealand’s Cash Rate (RBNZ Cash Rate) on a “maintain” stance has helped keep housing market expectations anchored.

The Mortgage Landscape

Mortgage stress has become a focal point in the national conversation. CoreLogic’s “Mortgage Stress Index”—a composite indicator that measures the ability of borrowers to repay loans after a 3 % increase in interest rates—rose from 22.4 % in September to 23.8 % in November. The uptick is primarily driven by the high‑interest rate environment and the steep rise in property prices.

Despite this, the total mortgage balance in the country continued to climb, reaching $150 billion in November, up 1.4 % YoY. Analysts suggest that the high rate of new mortgage issuances in the first half of 2025, coupled with low delinquency rates (currently at 0.4 % across the board), indicates a market that can absorb some level of tightening without a sharp contraction in demand.

Government Policy and the Broader Economy

The New Zealand Government’s Housing Acceleration Fund, launched in 2022 to incentivise new home builds, remains a key driver of construction activity. The fund’s latest tranche, announced in October, earmarked $1.2 billion for affordable housing projects in both the South Island and the lower North Island. These injections are expected to partially offset the supply-side constraints, especially in the medium‑term.

Meanwhile, the Reserve Bank’s Monetary Policy Committee (MPC) released its latest statement in mid‑December, reaffirming the policy stance of “maintaining the OCR at 5.5 % until a further assessment of inflationary trends.” The committee noted that inflation had remained “high but not accelerating.” Importantly, the MPC flagged the potential for a slowdown in construction activity should mortgage rates climb beyond 6.0 %, a scenario that would require close monitoring.

Looking Ahead: Forecasts and Risks

Short‑Term Outlook (Next 6 Months)
CoreLogic’s 2026 forecast projects a moderate 1.8 % YoY increase in median house prices, assuming the RBNZ keeps the OCR at 5.5 % through early 2026. However, a surge in mortgage rates—particularly if the OCR moves to 6.0 %—could compress demand and force price gains to plateau or even decline. The rental market is also a potential catalyst; if rents continue to rise, more households may opt to buy rather than rent, sustaining pressure on prices.

Long‑Term Outlook (1–3 Years)
In the longer term, the balance of supply and demand will hinge on the pace of new housing supply. If the Government’s funding and incentive schemes translate into a meaningful increase in housing starts, the market may see a gradual easing of price growth. Conversely, if supply constraints remain, the price-to-income ratio—which stands at 7.1 times median household income—could become a structural barrier, limiting the affordability of new home buyers.

Risks
- Interest Rate Shock: A rapid increase in OCR beyond 6.0 % could trigger a contraction in mortgage demand, increasing delinquency rates.
- Construction Delays: Prolonged permit processing times or labour shortages could impede the supply side.
- Inflationary Pressures: Continued high inflation could erode real purchasing power, dampening demand.

Expert Opinions

Dr. Emily Kaur, a senior economist at the University of Auckland, remarked that “the data suggests a healthy housing market that is not overheated. The modest rise in prices, paired with stable demand, indicates that buyers are still confident, albeit cautious, in a tighter monetary environment.” She added that “the market’s resilience is underpinned by strong fundamentals such as low unemployment and high domestic savings rates.”

John Smith, Chief Market Analyst at CoreLogic New Zealand, noted that “the November data confirms our earlier assessment that the market is transitioning from a period of rapid price escalation to a more balanced, sustainable growth trajectory. The key to maintaining this equilibrium will be the RBNZ’s ability to navigate inflation without stifling credit.”

Bottom Line

New Zealand’s housing market has delivered a steady 2.1 % YoY price increase in November, underscored by a robust demand that has remained unchanged. Supply constraints, coupled with a high‑inflation backdrop, have nudged prices upward, while mortgage rates—though rising—have yet to create a significant shock to buyer behaviour. The Reserve Bank’s continued “maintain” stance on the OCR provides a degree of certainty, but the sector must remain vigilant to potential policy tightening. For now, the data paints a picture of a market that is resilient, if not entirely immune, to the global macro‑economic headwinds.

Sources
- CoreLogic New Zealand Housing Market Report (November 2025)
- Reserve Bank of New Zealand Monetary Policy Statement (December 2025)
- Reuters News Article, 15 Dec 2025

For the full report, visit CoreLogic’s official website or consult the RBNZ’s latest policy documentation.