By Steve Strawbridge, General Manager – Wellington Glass & Mirror
A Shift in the Economic Climate
After several years of economic headwinds, the Reserve Bank has made several OCR cuts. The rate now sits at 2.5% and is beginning to ripple through to New Zealand households. It may be too soon to call a full rebound, but optimism is growing across Wellington and Kāpiti. Many homeowners and small-scale investors had paused their renovation plans when rates first spiked.
Now, they’re starting to move forward again.
“We’re moving from fear to focus.”
– Brad Olsen, Infometrics
As Brad Olsen from Infometrics recently noted, this cycle feels different. People aren’t rushing to buy new builds; they’re improving the homes they already have. Across the region, there’s steady growth in retrofit double glazing, bathroom and kitchen upgrades, and practical weather-tightness work. Homeowners are focusing on comfort, warmth, and energy efficiency – investments that enhance daily living and add long-term value.
Confidence Returning to the Building Sector
According to EBOSS’s October 2025 Pulse Report, national construction activity has stabilised after a long period of decline. Residential consents are holding steady at around 33,500 per year. Construction cost inflation has eased to just 0.8%, the lowest level in several years. Mortgage servicing costs have also dropped, now consuming around 36% of disposable income, down 4% over the past year. This shift is giving homeowners more room to plan upgrades instead of considering a sale.
Confidence is returning and with it, practical renovation activity rather than speculative buying.
A Renovation Recovery, Not a Boom
In Richard Prebble’s recent NZ Herald column, he pointed out that lower interest rates are not a silver bullet for the housing market, but they are restoring confidence, the missing ingredient in 2024. We’re seeing that confidence translate into real-world momentum. Wellington and Kāpiti, where homes are often older and energy efficiency is a key concern, are perfectly positioned for a “renovation recovery” rather than a speculative boom.
Smart Timing for Landlords
For landlords, the timing is equally interesting. Rents have flattened, but build costs are finally predictable again, and energy-efficient upgrades such as double-glazing, insulation, and modern joinery are paying off in tenant retention and compliance. With mortgage rates expected to settle in the low 4 % range by mid-2026, smart investors are using this window to modernise their portfolios before competition ramps up again. From a tax perspective, landlords should also know that some retrofit work can be partly deductible. According to the Inland Revenue’s property maintenance guidelines, the maintenance portion of a project can often be claimed as an expense, while performance upgrades are treated as capital improvements.
Under current IRD guidance:
- The maintenance portion of a project – such as restoring existing joinery or replacing deteriorated glass – can generally be expensed.
- Upgrades that improve performance (for example, upgrading to double-glazed units) are usually capitalised.
Always discuss this split with your accountant – getting it right can deliver genuine tax advantages and help offset upgrade costs.
Looking Ahead
Having been through multiple market cycles in the last two decades, I can say this with confidence, the smart money moves before the headlines catch up. Homeowners and landlords who invest now, while the market is steady and pricing is competitive, will be the ones best positioned when demand accelerates again.
“The smart money moves before the headlines catch up.”
At Wellington Glass & Mirror, we’re already helping customers take advantage of this moment, improving homes for comfort, value, and energy performance, ready for whatever the next cycle brings.