Zero growth year: ANZ predicts no house price growth for 2025
Monday, 1 September 2025
If you have been holding out hope of seeing a rise in house prices late in the year, ANZ Bank has predicted otherwise.
Zero growth on house prices is now the ANZ forecast for 2025 in its latest Property Focus report. The bank had previously forecast 2.5% growth for the year.
In its report, it called it a subdued winter with house prices declining, taking prices back to the same level they were in late 2024.
“This decline coincided with wider weakness in economic data from April to June. Regionally, Auckland led price declines, while the housing markets in the South Island have been more resilient, in line with their stronger job markets.”
Now the bank’s prediction is of growth of 5% but not until 2026, supported by lower interest rates and a cyclical economic recovery.
ANZ’s economists said price falls over winter had been led by renewed weakness in Auckland’s house market while prices in the South Island had, for the most part, held onto their gains over the last two years, while prices in the North Island outside of Auckland had largely tracked sideways.
“Looking more closely, it’s clear that relative economic performance explains much of this regional variation. Job losses have been most acute in Wellington, Auckland, and many regional parts of the North Island.”
Now more jobs are going in Wellington with the announcement the Department of Internal Affairs has confirmed restructuring that will cut 126 permanent and temporary jobs.
Job insecurity has been holding back Wellington’s job market for over a year. Hospo and retail closures, often citing cost of living increases, have contributed to a property market that has gone nowhere for months.
ANZ’s economists said house prices had fallen since the start of the year in Wellington and Auckland, and had been patchy around the rest of the North Island.
“The impact is even clearer in the rental market: Rents on new tenancies are down 5% year on year in Wellington and 2% year on year in Auckland – weaker than the national average of a 1.4% fall in rents.”
The report said in contrast, the South Island had maintained broadly stable job numbers over the past year, and the Waikato had seen the fewest job losses among North Island regions. Those parts of the country had been supported by a strong rural economy and the resumption of tourism, resulting in rent increases and house prices edging up.
House sales were steady and after months of the market being overstocked, the inventory now showed signs of returning to usual levels, the report said.
“This suggest that buyers still have plenty of choice, but the market is on track to stabilise. Again, though, there is regional variation: inventories have continued to rise in Auckland, while they have fallen outside of the main centres.”
ANZ has however predicted further house price falls in the next few months but said the Reserve Bank’s greater-than-expected willingness to cut at its August Monetary Policy Statement, led them to expect the official cash rate to reach 2.5% by the end of the year.
“This will support a gradual recovery in the housing market and the wider economy, and we continue to expect 5% house price growth in 2025. There is a chance that the Reserve Bank’s easing stance triggers a quick lift in sentiment in the housing market, but we expect the shift in sentiment will be gradual given lingering headwinds from a soft job market and high inventories of property for sale. We also expect house price growth will be tempered by expectations that interest rates will eventually lift back up from low levels.”
After the last cash rate announcement ANZ’s chief economist, Sharon Zollner, said they were now predicting cuts in October and November when they had previously thought November and February.