An interesting pattern has recently emerged in the property market.
Many mortgage borrowers are accelerating their repayments, even choosing to pay extra. Meanwhile, some sellers are lowering their asking prices to more realistic levels. These sets of figures may seem unrelated, but together they point to the same underlying development: the market is changing in subtle ways.
Many buyers are repaying their loans ahead of schedule
Data from several banks shows a remarkably consistent trend: many borrowers are no longer content simply to make their contractual repayments.
Kiwibank says its mortgage customers’ actual repayments, excluding interest, are approximately 36% above the market average. This is no random fluctuation, but the result of two approaches: setting higher regular repayments and consistently making extra payments.
Other banks are seeing similar patterns.
ANZ says more than 44% of its customers are at least 6 months ahead on repayments, and close to half have cash buffers exceeding NZ$5000. Westpac reports that approximately 65% of customers are at least three months ahead, with an average repayment buffer of 10.6 months. BNZ goes further, saying approximately 55% of its customers are more than two years ahead of their loan repayment schedules.
In other words, more households are actively shortening the time they remain in debt.
With the interest rate outlook still uncertain, repaying mortgages early is, to some extent, a form of risk management. By reducing debt and building buffers, borrowers are preparing for possible changes in income or interest rates.
For this reason, mortgage repayment is shifting from a passive obligation to an active decision.
Sellers are reassessing the market
Meanwhile, changes are also taking place on the selling side.
The latest figures show that, in the first quarter of this year, properties across the country that had price reductions saw their asking prices cut by an average of approximately NZ$33,212. In total, approximately NZ$54,700,000 was wiped from asking prices. Although these reductions were below the peak in early 2024, they still show sellers reassessing the market.
The structural changes in the property market deserve even closer attention.
Although the total value of new listings rose by nearly NZ$800,000,000 year on year, only 4.9% actually had price reductions. This suggests that the market is not declining across the board; instead, sellers are setting prices closer to realistic sale levels from the outset.
Regional differences are also pronounced. The proportion of listings with price reductions reached double figures in areas such as Manawatū/Whanganui and Northland, compared with only around 2% in Auckland and Canterbury. This also shows that market adjustments are not happening at the same time everywhere, but are closely tied to local supply, demand and stock levels.
Across all regions, however, a common feature is emerging: sellers no longer determine prices on their own.
Two changes pointing in the same direction
Looking at these developments together makes the picture more interesting.
Buyers are tightening their finances and trying to reduce debt; sellers are adjusting prices to improve their chances of a sale. Everyone is becoming more cautious.
The market atmosphere once driven by expectations is gradually fading. More practical considerations are taking its place: whether income is stable, whether interest rates will change, and whether there is room in the cash flow.
As decisions increasingly revolve around these questions, the market’s pace naturally changes.
So who is actually in control of the market?
On the surface, buyers do appear to hold more of the initiative. Greater repayment flexibility and more secure financial arrangements give them greater confidence in negotiations. But sellers are not entirely passive either. The low proportion of price reductions suggests that widespread discounting is not taking place; rather, sellers are adjusting their expectations earlier.
A more realistic interpretation is that the market is gradually finding a new balance. Buyers are no longer readily chasing higher prices, while sellers are no longer clinging to their original asking prices. Both sides are adjusting their pace to reflect actual conditions.
Observations and reflections
Some people are repaying their mortgages faster; others are adjusting their asking prices. Fundamentally, both are doing the same thing: taking a more cautious view of the future. Fewer decisions are being made on instinct or expectations alone, as people examine their finances more carefully: is their income stable, could interest rates change again, and how long will their cash last?
The market is changing accordingly. Buyers are less quick to commit, and sellers are less willing to hold firm on prices. As they negotiate, the pace has slowed, but it has also become more grounded in reality. Rather than asking which side is stronger, it may be more accurate to see this as a process of finding a new balance. Those who understand conditions more clearly and prepare more thoroughly hold more of the initiative.
What do you think?
Have you noticed the market changing recently? Would you choose to make extra mortgage repayments now, or hold on to cash? Has anyone you know started cutting their asking price or noticeably stepped up their mortgage repayments?