It’s been a slow, steady recovery for New Zealand’s housing market, but on the water’s edge, things are looking a little brighter.

While mainstream property prices have largely stayed flat, data from Bayleys’ latest Waterfront Residential Update Q3 2025 shows the average sale price for waterfront homes has risen to $1.345 million, with a 54% price premium paid for waterfront properties. It’s a sign the waterfront segment may be regaining ground faster than the wider market.

Auckland recorded the highest number of waterfront sales in the 12 months to March this year, followed by Waikato, Bay of Islands and Wellington. Elsewhere every region reported some level of waterfront sales, whether it be coastline properties, lake or riverside.

Based in Marlborough, Bayleys waterfront specialist Will Porter says he started to notice things getting better for homes on the water’s edge around the same time people were talking about being at the bottom of the market.

“It’s basically due to the smaller supply of waterfront homes. There’s not really much more waterfront space to build more, whereas in every other category there’s often new additions and builds.”

“Because of that, waterfront listings just weren’t subject to the same level of oversupply as the rest of the market meaning the recovery was a lot faster.”

He also believes that due to the luxury nature of many waterfront properties the market was far more resilient.

“The buyers for these properties are often high net worth individuals with more money to spend. In my eyes, there's always somebody to sell to, it’s just working out who that group is at the time.”

Porter says in Marlborough activity among some local buyers has slowed, making way for a lot of Kiwi buyers who have been living abroad.

“We used to have lots of buyers from the wine-making industry, but that sector is navigating some challenges at the moment. Now we’re looking at people who have done a stint abroad or nearing the end of it, and they're looking to secure a nice piece of paradise to come home to.”

“It really is an ever-changing space of who and where buyers come from. But they’re always there.”

Further north Bay of Islands waterfront specialist Irene Bremner agrees the limited supply of waterfront homes has helped the market to recover faster.

“To me, waterfront properties are always the gold bar in the marketplace, and a lot of them are held tightly for a long time, which increases demand.”

“We've got one listing at the moment that’s been in a family for 49 years, so people wait a long time to get their hands on these properties. When they come up, you’ve got to take action regardless of what the market or interest rates are doing.”

Bremner says what mainly drives waterfront sales is lifestyle and emotion.

“Our buyers are typically in a solid financial position. For them it's a holiday home, or maybe they're going to retire there.”

As for who’s buying in the Bay of Islands, Bremner says a range of people are choosing to transact.

“It’s not just the over 65s these days, there’s a lot of young people too. Most of them are local unless they are expats, Australian or Singaporean.”

“But with talk of an overturn on the foreign buyers ban we are getting a few more overseas inquiries.”

Will lower interest rates make things better?

With interest rates on a downward trajectory, buyer confidence is slowly starting to creep up. While helpful, both Bremner and Porter agree it isn’t the most important factor influencing a waterfront sale.

“I’ve never seen a negative flow-on effect from an interest cut, but I think it probably has less of an effect as the people that have the ability to purchase a waterfront home are generally still able to do so even when interest rates are through the roof” says Porter.

Bremner agrees and says that while buyers find it helpful to be across what’s happening with the economy, the state of it isn’t a do or die for them.

Not all water is equal

Across the country, lakeside homes are commanding the highest premiums, followed by coastal properties, but with geotechnical issues and increased climate risk many buyers have become increasingly mindful.

Porter says climate change is a huge topic of discussion.

“Rain has been a big talking point for most of rural New Zealand, and for us here in Marlborough we’ve had some really severe weather events.”

But despite that he says waterfront properties still have a huge appeal regardless of any perceived risk factors.

“You get the odd person that mentions water, and sea levels rising, but we’re there to manage any concerns. The main issues usually come from the insurance companies.”

“Naturally, insurance companies are really tightening up but that doesn’t mean a house would be impossible to insure, it just means that you’ll have to pay higher premiums.”

Bremner says for some buyers across the Bay of Islands climate risk is a deal breaker, but for many, they’re prepared for it and will always factor it into their decision.

The capital gains are great

With their indisputable lifestyle and financial value, it’s not surprising to see that the latest round of data revealed waterfront properties typically outperformed the mainstream market from a capital gain perspective.

Porter says despite the tough economy and increased awareness of climate change factors, it’s a trend he expects to keep growing.

“I think that waterfront property across the board in New Zealand will continue to be a safe bet as far as long term capital gains are concerned. This is especially true if you can get into the really good properties that are handy to town and more likely to be legacy homes that have been held by a family for a number of generations.”

“Even in the worst of the markets like what we've just been through, we'd still run very competitive campaigns on those kinds of homes. That’s a good indication of the level of demand for these properties that even when the market is at its lowest because we still struggle to keep up with the level of inquiry.”

So, in order to maximise your capital gains, what should you be looking out for in a waterfront property?

Bremner says the little things go a long way.

“Making sure that they’re well maintained and making sure that they have easy access to the water.”

Porter believes location and privacy are top of the list.

“The oldest properties are generally on the best sites so try not to always select the newest as it was probably the last one to be built and doesn’t have the best view.”

“Ultimately my advice to most people is, when those tightly held legacy properties crop up there's no such thing as paying too much as that value is likely to hold and continue to grow.”

How fast are they selling?

With the waterfront market on a much faster trajectory, both Porter and Bremner say the number of days it takes to reach a sale is far less than other properties.

“Currently, I would say it’s taking just under a month to shift waterfront properties, whereas compared to the rest of the market it’s taking around three to four months” says Porter.

Bremner agrees waterfront homes are also selling a lot faster in Bay of Islands too.

“They’re getting snapped up very quickly, but it's also all in the process too. If you advertise and market them properly then the vendors are informed, and the purchasers are informed, and we get a happy, happy sale on both sides for both parties.”

Ultimately, the waterfront market’s ability to hold value, and in many cases, outpace the broader housing sector underscores its enduring appeal. From sought-after coastal enclaves to premium lakeside retreats, these properties remain a scarce commodity that buyers are willing to compete for. With interest rates trending lower and early signs of recovery emerging, the next 12 to 24 months could present a rare window to secure a slice of New Zealand’s most desirable real estate.

If you’re considering parting ways with your prized waterfront home, now is a great time to reach out to your local Bayleys waterfront specialist with the annual Bayleys Waterfront magazine being released Labour Weekend (27th October 2025).