LJ Hooker Group Unveils 2025 Budget Wish List to Tackle Housing Market Pressures

LJ Hooker Group Head of Network New Zealand, Campbell Dunoon

With construction activity declining, affordability barriers persisting, and regional imbalances, LJ Hooker Group is calling on the New Zealand Government to introduce practical policy measures that support housing supply, affordability, and broader economic growth.

New LJ Hooker research confirms that homeownership remains a core aspiration for New Zealanders, with 81% saying they want to own their own home.

Most still value traditional features such as outdoor space (66%) and standalone homes (59%) [1, 2]. But younger generations are adapting to the current market conditions—45% of Gen Z and 40% of Gen Y are open to co-ownership models.

However, structural headwinds are weighing on the market:

Residential construction fell by 4.9% in Q4 2024 and is now down 25% from its 2022 peak.

Housing stock remains high, with nearly 36,000 listings recorded in April 2025—more than double 2021 levels—signalling subdued buyer demand.

Urgent action needed to stabilise the market

LJ Hooker Group Head of Network New Zealand, Campbell Dunoon, said now is the time for practical, growth-oriented solutions.

“The new build market is under real pressure. Construction costs have jumped 41% since 2019 due to our reliance on volatile international supply chains,” Dunoon said.

“To bring costs under control and get building back on track, we need to strengthen local supply chains—especially for key materials like timber, metal, and gib.

“The 2025 Budget is a critical opportunity to deliver the homes New Zealanders want—affordable, spacious, and attainable—while supporting economic recovery.”

LJ Hooker Group’s 2025 Budget recommendations:

1. Attract foreign investment to boost supply

Continued targeted easing of foreign investment restrictions could help address the construction slowdown. The government was on the right track when it passed the Overseas Investment (Build to Rent and Similar Rental Developments) Amendment Bill in February 2025. However, further refinements, such as depreciation allowances for build-to-rent fit outs could accelerate development, countering the 4.9% construction decline in Q4 2024.

With 40% of Kiwis—and 48% of Gen Z—open to apartment living, further build-to-rent can boost supply in high-demand areas like Auckland, despite its 6.2% property values drop in 2024.

“The BTR reforms are a game-changer, but we need depreciation and tax clarity to unlock the full potential of 25,000 BTR homes over the next decade,” Dunoon said.

2. Streamline consenting and resource management processes

Faster consenting is vital to lifting housing supply. While building consents are meant to be processed within 20 working days, delays remain a major hurdle despite reported improvements.

“Cutting red tape is a no-cost, high-impact way to enable development. It’s particularly urgent in struggling regions where faster turnaround times can reignite local construction,” Dunoon said.

3. Invest in infrastructure to unlock regional land

Better transport and utility infrastructure is key to unlocking land outside inner city areas. With two-thirds of New Zealanders preferring homes with gardens, regional areas offer a significant opportunity—if they are supported with the right infrastructure.

“Well-planned infrastructure reduces commute times, supports business activity, and makes outer suburbs more accessible and appealing,” Dunoon said.

Addressing regional disparities and negative equity

The current softness in the market has created risks for recent buyers.

“Someone who purchased a $1 million home in Hamilton in late 2021 might now see its value closer to $900,000—a 10% decline,” Dunoon said. “While many are buffered by wage growth or long-term gains, those who need to sell urgently may be facing real financial stress.”

The performance divide between regions continues to widen. Southland (+15.3%) and Gisborne (+14.4%) outperformed in 2024, while Auckland and Wellington continued to lag.

“Wellington’s decline probably reflects public sector cuts. Auckland’s stagnation is harder to explain, but we need policy that supports regional balance and restores consumer confidence,” Dunoon said.

High stock levels are also suppressing prices and squeezing vendors.

“An oversupplied market gives buyers more choice—but it creates pain for sellers who bought at the peak and could face negative equity.”

Supporting first-home buyers and affordability

Government-backed shared equity schemes and deposit assistance could help more young Kiwis enter the market. With 40% of Gen Y open to shared ownership, these initiatives offer a viable pathway to homeownership.

“Shared equity is a powerful lever. It helps people into the market, supports demand, and stimulates construction without overextending household finances,” Dunoon said.

Despite current challenges, sentiment remains strong: 84% of Kiwis still see property as a good long-term investment.

“The 2025 Budget is a chance to lay the groundwork for recovery. With the right settings, we can rebuild a housing market that delivers on space, affordability, and opportunity—for all New Zealanders,” Dunoon concluded.