As we step into 2025, the property market in New Zealand is brimming with potential. With lower interest rates, stabilising inflation, and rising business confidence, the landscape is ripe for property buyers, investors and homeowners alike. Whether you've been waiting for the right time to enter the market or are looking to reassess your mortgage strategy, now is the time to act.
A Positive Start to 2025
The new year brings with it a wave of optimism. Kiwibank economists highlight that business confidence is lifting significantly, with a net 9% of firms expecting economic conditions to improve – an encouraging sign after years of uncertainty. The building and construction sectors are leading the charge, with a net 29% of businesses in this sector reporting positive expectations for the future. This growth is setting the stage for a more active property market, with potential opportunities for both buyers and sellers.
Julius Capilitan, Finance Managing Director of Century 21, says: "This shift in business confidence is a clear indicator that the economic outlook for New Zealand is improving. As confidence rises, the property market will follow suit, creating exciting opportunities for those ready to make a move."
Lower Interest Rates and Easing Inflation: A Winning Combination
With interest rates continuing to decrease following the Reserve Bank of New Zealand's (RBNZ) latest OCR cuts, many homeowners are looking at this as the perfect opportunity to reconsider their mortgage options. Lower rates mean reduced monthly repayments, which could free up cash flow for other investments or allow homeowners to pay down their principal faster.
Kiwibank economists also highlight that inflation pressures are easing, which is good news for households and businesses alike. With the RBNZ expected to continue its rate-cutting cycle in 2025, borrowing costs should stay relatively low, making it an ideal time to either refinance or enter the property market.
In December, we discussed the pros and cons of breaking your fixed-rate mortgage to take advantage of these lower rates. A recent ASB report supports this idea, noting that while businesses face weak demand, the overall economic conditions are set to improve, thanks to easing inflation and falling interest rates.
What's Next for the Property Market?
The combination of lower interest rates and improving business confidence sets the stage for a stronger property market in 2025. Both Kiwibank and ASB economists suggest that while challenges remain, the outlook is far more positive than in recent years. With inflation easing and more competitive rates available, property buyers and investors are likely to see a market that is not only more accessible but primed for growth.
Julius says: "This is the time to take advantage of the opportunities available. Whether you're thinking about buying your first home, investing in property, or refinancing your mortgage, the positive shifts in the economy create the perfect conditions to take action."
Planning for 2025: A Year of Opportunities
As we look ahead to 2025, it's clear that the property market is set for a year of growth. Whether you're a first-time buyer, an investor, or someone looking to reassess their mortgage, there are more reasons than ever to take the plunge.
First-time buyers can take advantage of lower interest rates to enter the market with more affordable borrowing costs.
Investors have a great opportunity to secure financing at lower rates, maximising returns while the market stabilises.
Homeowners considering refinancing or breaking their fixed-rate mortgage can benefit from reduced payments and financial flexibility.
Take Action with Century 21 Financial
Century 21 Financial aim to help you make the most of the opportunities in 2025. From securing the right mortgage to navigating the ever-changing property market, they can work with you to create a strategy that fits your financial goals.