Download the full February Housing Chart Pack

All eyes on lower mortgage rates as investors return

CoreLogic NZ’s February Housing Chart Pack shows increased market activity among 'movers' and mortgaged multiple property owners (MPOs) in January, rising to 28% and 24% of property purchases respectively.

By contrast, first home buyers' (FHBs) market share dropped back slightly to 25% last month, from 26% in Q4 last year. However, it remains at above-average levels.

CoreLogic NZ Chief Property Economist Kelvin Davidson said although a modest upturn for property values may emerge in the coming months, current conditions remain favourable for all buyer types.

"Investors, in particular, have certainly started to return at levels not seen since 2021. Falling mortgage rates have been a key factor, significantly reducing the income top-ups typically required to sustain cashflow on recent rental property purchases," he said

"They've also benefited from the easing in the LVR rules from 1st July last year, and the looming full reinstatement of interest deductibility from April this year."

Mr Davidson noted that while the market share for FHBs had edged down, the group remains a strong force, particularly in areas such as Hamilton and Wellington, where they continue to hold high market shares.

"We expect this group to maintain a strong market presence in 2025, as overall deal volumes rise, even though their share of activity may dip a bit," he added.

Mr Davidson said with the OCR and credit conditions set to ease further, all eyes will be on loosening mortgage terms in coming months.

"A key theme to watch this year is the terms that borrowers choose when taking out a new loan or repricing an existing mortgage. Recently, the focus has been on floating rates or short-term fixes, but at some stage in 2025, that could switch back to an emphasis on longer-term rates, especially if global uncertainty stays elevated.

"All in all, 2025 could see a subdued upturn for the property market, with values nationally rising by around 5%," he concluded.

Highlights from the February 2025 Housing Chart Pack include:

• New Zealand’s residential real estate market is worth a combined $1.61 trillion.
• The CoreLogic Home Value Index shows property values across New Zealand edged down by another 0.1% in January. Over the year to January, values dipped by 4.3%, with the level now back down at an 18-month low.
• Total listings on the market were 29,301 in January to be 25% up on the five-year average. Total listing counts in Northland and Waikato are lower than last year, but Canterbury, Wellington, Otago, and Gisborne have seen sizeable increases of 15% and more.
• Rental market conditions remained flat amid slowing net migration. The pace of rental growth has now dropped to lows not seen since 2022.
• Gross rental yields now stand at 3.9%, which Is the highest level since early 2016.
• Around 71% of NZ’s existing mortgages by value are currently fixed but due to reprice onto a new mortgage rate over the next 12 months.
• Inflation is firmly back in the 1–3% target range, and with February's 0.5% cut, further OCR reductions seem likely in the coming months.

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