How Tariffs Have Hurt Your House Price and Mortgage

At the beginning of the year, sentiment in the housing market was overwhelmingly positive. Forecasts predicted up to 10% house price growth, but that optimism has faded fast. Now, with rising uncertainty tied to tariffs—especially those introduced by Trump—the mood has shifted. We’re seeing flat growth instead of gains, and the reasons why show clearly how tariffs have hurt your house price and mortgage.

The impact of tariffs isn’t direct. Instead, it’s the ripple effects—slowing global growth, reduced business confidence, and tighter credit markets—that are dragging on the property market. That’s how tariffs have hurt your house price and mortgage: through a subtle but significant shift in economic conditions that make housing less likely to appreciate, and mortgages more complicated to navigate.

There’s a lot of stock on the housing market right now, which is a big reason prices aren’t climbing. While transactions are increasing, the sheer number of listings means sellers must meet the market—and that often means reducing prices to close deals. Interest rates may be falling, but that’s not enough to trigger price rises when supply is so high.

At the same time, credit markets are drying up. Less money is flowing into home loans, which slows down buyers and keeps demand from rising. Even though interest rates often drop to boost the housing market, it doesn’t work as well when borrowing is harder to access.

The Reserve Bank was forecasting the Official Cash Rate (OCR) to fall to 3%, but the market now expects it to go as low as 2.65%. That’s already being priced into mortgage rates. Some one-year fixed rates have been sitting at 4.99%, but predictions suggest they could go as low as sub-4%—possibly even around 3.95%.

That’s promising for buyers. First home buyers may see cheaper mortgage repayments, and for property investors, the numbers start to stack up again. But not everyone has benefited—those who fixed at high rates for five years are now watching rates fall and wishing they had more flexibility. That’s why it’s more important than ever to speak to a mortgage broker.

There’s no one-size-fits-all fix. Whether a six-month or one-year term is right depends on your situation—and with an OCR announcement on the horizon (as recorded), many are holding off decisions until more clarity arrives. What’s clear is that people fixing their rates directly with the bank are sometimes missing out on smarter strategies.

The key is personalised advice. Just because rates are dropping doesn’t mean you should automatically restructure. Everyone’s financial position is different, and the right approach depends on your long-term plans and risk tolerance.

• House prices in New Zealand are currently flat due to high stock levels and more realistic seller pricing.

• While interest rates are falling, borrowing is still constrained by tighter credit markets.

• First home buyers and property investors could benefit from lower mortgage repayments, but only with the right advice.

• Now more than ever, it’s crucial to speak to a mortgage broker before locking in rates or making big property decisions.

Feeling uncertain about your mortgage in the current market? Talk to a Lighthouse mortgage broker today to get expert advice on refixing, restructuring, or purchasing- click here to get in touch.

If you’d like to learn more, check out these other episodes below.