ANZ and BNZ economists both downgrade their 2025 house price forecasts, expect stronger increases next year

Economists at both ANZ and BNZ have downgraded their house price forecasts for this year.

BNZ has has dropped its house price forecast to between 2% and 4% annual growth this year, while ANZ is now forecasting 2.5% annual price growth.

"Price gains remain glacial," BNZ Chief Economist Mike Jones says.

"Stirring a shakier demand backdrop in with our existing concerns about elevated supply, points to this dynamic continuing," says Jones.

"We've shaded our 2025 annual house price inflation forecast down to a 2% to 4% range accordingly, (5-7% previously)."

ANZ's economists, led by Chief Economist Sharon Zollner, describe the housing market as "subdued."

"Sales volumes have stabilised around their long run average, but rising demand has been met with an ample supply of new listings," the ANZ economists say.

"Indicators of the balance between housing supply and demand continue to drift sideways, leading us to downgrade our forecast for house prices," says ANZ.

"We now expect house prices to rise 2.5% in 2025 (previously 4.5%)."

Economists at both banks are forecasting annual house price growth to kick up to 5% next year.

"We continue to assume a marginal pick up to 5% annual house price inflation through calendar 2026," BNZ says.

"We expect that the housing market will heat up a touch next year following further OCR reductions and a strengthening and broadening economic recovery, leading to more significant increase in house prices of 5% over 2026," says ANZ.

ANZ is New Zealand's biggest residential mortgage lender with loan exposure of $111 billion as of March 31. BNZ is fourth biggest, with exposure of $62 billion.