Housing market steadies, Tony Alexander reports
New data from independent economist Tony Alexander’s June 2025 NZHL Property Report showed early signs of stabilisation in New Zealand’s housing market – though conditions remain firmly tilted in favour of buyers.
The report comes as average mortgage rates have eased in line with the OCR’s decline to 3.25%, but economists say further rate cuts are unlikely. Fixed rates have stabilised around 5.63%, and subdued activity reflects high stock levels and slower population growth.
Based on 393 real estate agent responses, the report revealed ongoing weakness across most key indicators. However, first-home buyer activity is increasing and concerns over listing shortages are growing.
“Most indicators this month have pulled back from the quite depressed levels of late-May. But most also remain in weak territory signalling a market still strongly in favour of buyers,” Alexander (pictured above) said.
First-home buyers active, investors cautious
Real estate agents report strong momentum among younger buyers. A net 39% say they’re seeing more first-home buyers in the market – up from 29% in May, though down from the peak of 52% in March.
“Young buyers have been a key market force since the start of 2023 with a meaningful falling away happening only in mid-2024 when the economy slid back into recession,” Alexander said.
Investor interest, on the other hand, continues to ease. A net 3% of agents say they’re seeing fewer investors looking to buy, down from +18% in March.
“Recent developments have had more of an impact on investors than young purchasers,” Alexander said, pointing to factors like “shortages of good tenants and reduced ability to raise rents” as well as rising maintenance, council and insurance costs.
Buyer worries shift from interest rates to job security
Employment concerns remain elevated, with 49% of agents citing this as a key issue for buyers. Interest rates are no longer a dominant fear, while finance access and price risk remain moderate worries.
“There have been slight reductions this month in agent perceptions of buyer concerns about prices falling after making a purchase and availability of finance,” Alexander said. “But for three months in a row now worries about listings have increased.”
A net 13% of agents reported more requests for appraisals – an improvement from 5% last month, but still below last year’s levels.
These concerns are reflected in the latest Westpac-McDermott Miller Employment Confidence Index, which edged up to 88.8 in June but remains near post-pandemic lows. Job prospects and earnings expectations remain subdued, contributing to cautious buyer sentiment despite falling mortgage rates.
Bargain hunting, not FOMO, drives investor motivation
Despite the weak conditions, a net 9% of agents reported an increase in fear of missing out (FOMO), up from 5% last month – the highest reading since 2023, but still low by historical standards.
“We have to go back to the latter part of 2023 to find a period when FOMO seemed to be quite prevalent,” Alexander said. “Even then, the readings at 40% were very low compared with those above 80% during the peak of the pandemic frenzy.”
Investor buyers, he added, continue to be motivated primarily by the hope of securing a bargain. Only a minority see retirement planning or interest rates as motivating factors.
Appraisal activity steady, listings could tighten
Although seller interest rose slightly, Alexander said agents are beginning to report listing shortages in some markets.
“One or two agents noted the appearance here and there of some listings shortages and it will be interesting to see how stock for sale tracks in coming months,” he said.
Meanwhile, a net 19% of agents say investors are bringing more properties to the market to sell, continuing a trend seen since late 2023.
A clear buyer’s market – for now
The survey confirms that buyers remain in control of negotiations. A net 35% of agents said sellers are more motivated to get deals done – a clear sign of a buyer’s market.
“Barring some excitement in the middle of 2023, the market has been solidly in favour of buyers since the start of 2022,” Alexander said.
