Housing affordability has hit its most favourable level in six years, as a 2.5% drop in the Official Cash Rate (OCR) since August 2024, combined with steady average income growth and stable property values have helped to ease mortgage pressures.

The latest Cotality Housing Affordability Report shows these factors have all contributed to a national value-to-income ratio of 7.5 in Q2 2025, the lowest level since mid-2019. In addition, the time needed to save for a home deposit has reduced to 10 years, compared to almost 14 years in 2021 and not far above the long-term average of 9.1.

Cotality NZ Chief Property Economist Kelvin Davidson said the most significant impact had come from improved mortgage serviceability. “Mortgage repayments now absorb around 44% of median household income, compared with a peak of 57% in Q2, 2022. That takes servicing costs back to their lowest level in more than four years. Buyers and existing borrowers are operating in conditions that are much more manageable than they were a few years ago,” Kelvin added.

The Cotality report showed affordability gains had been most significant in Auckland, Tauranga and Wellington, where mortgage repayments are now sitting slightly below their long-term averages.

Tauranga remained the least affordable of the main centres, with house values at around 8.5 times household incomes, which was nevertheless a significant improvement from the peak of nearly 12 in late 2021. 

Auckland had a value-to-income ratio of 7.9, the lowest level in a decade, while Wellington at 6.4 times was in line with its long-run average for the first time since 2016. Hamilton (7.5), Christchurch (7.4) and Dunedin (6.6) saw lesser improvements, as property values in those cities have been more resilient, Cotality said.

Meanwhile, recent OCR cuts are also behind the upward momentum emerging in New Zealand’s property market. The latest data from realestate.co.nz shows the 8,769 jump in new listings in August 2025 was a 9% increase on the number recorded in August 2024. 

Nine of 19 regions recorded an increase in new listings compared to 12 months ago. Bay of Plenty new listings surged the most, increasing 46.7% last month compared to the same time last year.  Gisborne experienced a jump of 40.9% year-on-year, and Coromandel recorded the third-highest increase with new listings up 39.1% year-on-year. Nelson and Bays (18.6%), Auckland (13.4%) Wellington (11.5%), Waikato (9.1%) and Otago (5.5%) also enjoyed healthy new listings increases.

Raine & Horne New Zealand General Manager, James Shepherd said that with the national average asking price stable and interest rates coming down, the signs were all positive for continued movement in the market. 

“All of these factors are combining to create a window of opportunity for people ready to buy or sell.  An increase in new listings indicates growing confidence by sellers, which in turn should encourage more buyers looking to take advantage of lower interest rates.”

James added, “Now is a great time for both buyers and sellers to start making decisions about their next steps.”

Whether you want to buy, sell or rent a property, don’t hesitate to contact your local Raine & Horne office.