Nick Stewart (Ngāi Tahu, Ngāti Huirapa, Ngāti Māmoe, Ngāti Waitaha) is a financial adviser and CEO at Stewart Group, a Hawke’s Bay-based CEFEX & BCorp-certified financial planning and advisory firm.
The great Kiwi dream of buying your first home for three times your annual wage has gone the way of the moa.
New Zealand’s housing market in 2025 tells a story no amount of political spin can soften.
With 2.125 million private houses serving 2.042 million households, we’re walking a tightrope.
Auckland’s median weekly rent hit $650, and the average New Zealand house costs $881k.
It’s more than just ‘expensive property’. We’re witnessing fundamental reshaping of how Kiwis live.
The numbers don’t lie, even when politicians might prefer they did.
A typical first-home mortgage of $570k at 4.75% interest translates to $686 per week, or nearly $36k annually for three decades.
That’s a generational commitment that would make our grandparents’ heads spin.
Today’s buyers face a different equation: house prices have increased at 5.4% annually over the past 20 years, while wages have lagged at 4.2%.
This isn’t just about lifestyle expectations – the maths doesn’t add up for ordinary Kiwis.
Let’s compare NZ to similar economies. In NZ$, median house prices sit at (round numbers) $682k in the UK, $698k in the USA, $859k in Canada, and just over $1 million in Australia.
We’re not alone in this crisis, but that’s cold comfort for Kiwis watching homeownership slip away.
Even property investment, once considered a path to wealth, tells a cautionary tale.
Take a real example from the current market: a $794k house with a $400k mortgage, renting for $624 weekly.
After rates, insurance, interest, maintenance, and management fees, the net return is $1609 annually – just 0.408% on the owner’s $394k equity.
Without underlying asset inflation of at least 2% annually, property investment becomes a fool’s game.
The magic isn’t in rental returns – it’s in the Government’s implicit commitment to maintaining inflation levels that protect asset values.
The fundamental difference between then and now isn’t just price; it’s expectation versus reality.
Previous generations had low expectations and even lower prices. Today’s buyers have high expectations with even higher prices.
The old social contract is broken. Where a single income could once secure family housing, today’s dual-income households struggle to service mortgages that consume their entire financial capacity for three decades.
Additionally, we’ve created a nation of tenants. Approximately 625,000 households are now renting – about 29% of all private dwellings. These are families priced out of ownership, paying someone else’s mortgage while unable to accumulate equity.
Politicians love to promise housing solutions, but supply and demand operate independently of electoral cycles. Remember then-Prime Minister Jacinda Ardern’s grand promise of 100k new homes? The promise evaporated faster than Heretaunga Plains morning mist.
With population growing at 1.252% annually and construction struggling to keep pace, the pressure cooker of demand continues.
Political promises can’t magic houses into existence any more than they can repeal the laws of economics.
The solution isn’t in clever policy tweaks, grandiose announcements, or first-home buyer subsidies that inflate demand.
It’s acknowledging our housing market has disconnected from local incomes and productivity – and political theatre won’t bridge that gap.
New Zealand’s housing crisis demands we reconsider everything from urban planning to taxation policy.
The days of auld, when hard work and modest expectations guaranteed homeownership, are long gone.
What emerges next will define whether New Zealand remains a place where ordinary families can build generational wealth, or becomes a playground for the already-wealthy while everyone else pays rent forever.
The numbers tell the story. The question is whether we’re prepared to listen.
For those navigating this challenging landscape: have a plan. One that’s tested with evidence, tracked and measured against real outcomes – not political promises or wishful thinking. Consider seeking financial advice from a fee-only fiduciary who has no vested interest in selling you products or properties.
After all, those housing numbers don’t care about our hopes; they respond only to careful preparation and realistic expectations.