July/August update | What buyers want, where the market’s moving, and what to expect next
I was a little late with this update, so I decided to combine July and August into a bumper update. Between winter chills, unexpected tsunami warnings, and banks being as slow as Auckland traffic on a wet Monday, it’s fair to say 2025 is keeping everyone on their toes.
Fortunately, there’s plenty happening in the housing and finance world that’s a bit more predictable. We’ve seen softer-than-expected inflation, growing whispers of interest rate cuts, and some good news for anyone building, both from a market confidence point of view and the potential to access cheaper building materials.
We’ve also been out and about (despite the weather), meeting with builders, attending industry events, and getting deals over the line for clients, including a few great ones in Queenstown–Lakes, which continues to punch above its weight.
Here’s what’s been going on.
OCR on hold, but a cut could be around the corner
The Reserve Bank held the Official Cash Rate (OCR) at 3.25% in July, opting to wait for more data before making its next move. Inflation, as measured by the Consumers Price Index (CPI), rose 2.7% in the 12 months to June 2025. That’s the highest annual reading in a year, but still broadly in line with expectations, and importantly, the quarterly rise of 0.5% came in slightly below forecasts of 0.6% or higher.
Economists had tipped a 2.8% to 2.9% annual result, so the softer outcome has been welcomed. ASB senior economist Mark Smith said the lower-than-expected result “paved the way” for the Reserve Bank to cut the OCR at its next meeting in August, predicting a 25 basis point drop to 3.00%.
Smith also noted that the RBNZ would likely “look through the tick-up in near-term CPI inflation,” given the slowdown in both the global and local economy. “After earlier tapping the monetary policy brakes, the RBNZ is expected to press the accelerator and actively provide policy support,” he said.
We’ll have to wait and see, though, whether we see many more meaningful cuts in mortgage rates from the banks over the coming months.
Build NZ Expo insights: Good design sells
At the Build NZ Expo I attended last month,I sat in on a great session from The Research Agency about what really drives buyers to commit. The key takeaway? People fall in love with homes, not floorplans. It turns out good design, smart layouts and nice finishes matter a lot more than just ticking off specs and square metres. Builders who get this right are more likely to sell faster and at better prices than those churning out poorly designed, cookie-cutter homes.
You can read more on this here.
Building products reform to cut costs
In July, the Government proposed changes to allow more overseas building materials to be used in an effort to reduce construction costs. The aim is to improve supply diversity and price competition.
While the details are still being worked through, this could help bring down project costs, speed up build timelines, and make it easier for smaller builders to access affordable materials. It’s a positive move for anyone planning a new build or development.
Market update: Construction still patchy, but Queenstown–Lakes region continues to perform
Construction activity remains mixed across the country. Some areas are still dealing with subdued demand, but others are holding up well. For example, we’ve recently settled a couple of house and land packages in Wānaka for clients looking to build long-term investment properties. The Queenstown–Wānaka region continues to outperform much of the country.
Auckland, on the other hand, is slower to respond, but we’re hopeful for some uplift in the coming months as interest rates ease and banks become more willing to lend with lower test rates.
Bank turnaround times still slow
One thing that hasn’t improved yet is bank turnaround times. Processing remains frustratingly slow, largely due to high volumes of borrower refixes, restructures, and refinances. With so many borrowers rolling off low fixed rates, the system’s under pressure, and many lenders are running lean operational teams.
Hopefully, as the current wave of activity tapers off, we’ll see response times improve. But in the meantime, we’re keeping close contact with our BDMs and pushing things along as best we can.
Colab: Full-journey mortgage advice
As a final note to this month’s update, I just want to share a bit about what inspires me and drives the work we do at Colab.
I’ve always been passionate about new builds, great design, and the power of well-constructed homes to improve how people live. I believe that thoughtful architecture, energy efficiency, and homes that stand the test of time don’t just benefit individual homeowners, they help lift the overall quality of housing in our communities.
Whether it’s helping a first-home buyer into a warm, modern home or supporting a builder who’s committed to doing things properly, it’s incredibly rewarding to be part of that journey. If we can help improve New Zealand’s housing stock while making the lending process more transparent and less stressful, that’s what success looks like for me.
If you're planning to build, buy, restructure, or just want a second opinion on your lending setup, feel free to reach out. I’m always happy to run the numbers or talk through your options.
The housing market, interest rates and lending rules change all the time. You can always get up to speed in the News section of our website.