Market Update 12 Aug 2025: Smaller Homes, Bigger Costs - What It Means for Property Investors in 2025
- Ryan Smith
- Aug 13
- 3 min read
Giving you exclusive insights into the New Zealand property market and keeping you updated with the latest in property investment concepts.
Property market update for August 12, 2025.
A recent report has revealed a surprising shift in the New Zealand housing market: the cost of building new homes continues to rise - even as the average size of those homes shrinks.
For property investors, this trend has important implications for how value is assessed and where opportunities lie.
Key Insights from the Latest Data
According to Q2 2025 figures:
The average build cost of a new home reached $471,683, marking a 29% increase over the past five years
The average home size has dropped to 145 sqm, down from 201 sqm in 2010
Townhouses and home units are now the most cost-efficient to build, averaging $347,206 per unit and $3,106 per sqm - significantly lower than standalone homes and apartments
What This Means for You as an Investor
As build costs rise and home sizes shrink, smart investing is less about square footage and more about value per square metre.
We’ve seen firsthand how two comparable projects, just a few suburbs apart, can differ by an extraordinary $2,397/m² in build cost.
Whether you're considering a compact townhouse or a larger standalone home, price per m² is a key metric. It allows you to compare apples with apples and identify where the real value lies.
Always check it to ensure you're making a strong, informed investment.
Tools to Stay Ahead
Smart investors use smart tools. If you're planning your next move, these calculators can help you assess affordability, returns, and repayment strategies:
Use them to crunch the numbers and make confident decisions in today’s evolving market.
Key Takeaways
Affordability is evolving: Smaller homes don’t always mean smaller budgets
Investment strategies may need adjusting: Townhouses and multi-unit developments could offer better value and stronger rental yields
Expect higher demand for townhouses: Rising build costs and shrinking sizes are making standalone homes less viable for many buyers
How Can We Help You?
We help Kiwis build wealth through property investment. Our advisors will take the time to understand your individual needs and recommend suitable investment properties to help you build wealth and set up your retirement.
What Does This Look Like?
We use a 3-step process:
We start with a Discovery Meeting where we learn about you, your goals, etc., and you learn more about us.
This is followed by a Strategy Meeting where we model your retirement plan, understand key investment concepts, and briefly touch on some investment choices.
Finally, an Asset Selection Meeting where we discuss investment options in more detail and make any recommended adjustments based on what we now know about you.
Who Are We Right For?
We help people make smart investment choices and set up their futures. From first-time investors to experienced investors, we can cater to a wide range of people and help set up their futures through research-based property investment.
How Much Does It Cost?
Our advice is free to you! If you choose to invest, we’re paid by the property developer. This developer-paid model allows us to provide no-obligation property investment advice in New Zealand, without charging clients directly.
What Do We Do, And What Don't We Do?
What We Do
We offer end-to-end New Zealand property investment advice, helping Kiwi investors grow wealth through smart, data-led decisions. Our focus is on quality new builds in strong locations, tailored to your goals, guided by a team that knows the NZ market inside out. What We Don’t Do
We don’t do KiwiSaver, shares, cryptocurrency, or broad financial planning. Thrive is not a generalist firm. We specialise in property investment in New Zealand because that’s where we deliver the most value. By staying focused, we cut through the noise and help our clients make confident, well-informed property investment decisions.
How Do I Start?
Start the process now by booking a time to talk with our advisor here.
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