Some normality is quietly returning to the residential property market, with lower interest rates boosting confidence.

Just as a new year provides a great opportunity for a work-life audit, the housing market is also rebalancing – heading into a fresh cycle that Bayleys tips will be an Altogether Better year for property.

We wrapped up 2024 on an optimistic note seeing greater inventory, increased enquiry and activity, more people at open homes, more offers received, busier auction rooms, and more deals concluded.

While lower interest rates late last year were very welcome and definitely stimulated the market, we haven’t seen a marked increase in property values and don’t expect significant escalation this year either.

Although some regions and sub-regions have seen modest uplift, values have generally stabilised. Data shows median national residential values remain well below the post-Covid peak, but higher than pre-pandemic March 2020 figures which speaks to viewing residential real estate through a long-run lens.

If you’re buying and selling in the same market, then everything tends to come out in the wash. If you’re holding out for a possible higher price down the line, accept that you’ll likely pay more for your next property as a rising tide tends to lift all boats.

Declining interest rates do contribute to market optimism, and drive confidence to move on – whether that’s upsizing, downsizing, shifting sideways or divesting secondary properties. With a lot of mortgage holders locked into interest rates around 6.8 percent, we expect to see real activation in the market once those rates head into sub-5.5-percent territory.

But in broader terms, lower interest rates do indicate structural weaknesses in the economy and sadly, job insecurity is a major factor for many New Zealanders today. The banking sector’s lending policies will be overlaid with caution given the softer labour market and other economic indicators.

A summer break can clarify goals for the year ahead and propel decision-making, and Bayleys’ residential teams around the country are primed to help you navigate the new real estate landscape ahead.

So let us help you thrive in 2025 because if it’s property related, we’re with you all the way.