But why exactly do we say 5% and 6% for growth properties? 

Well, here’s how we break it down:

#1 – Inflation 

Over time the cost of things goes up, and the value of money goes down. That’s inflation.

That means the cost to build or replace a house goes up; materials go up; labour goes up.

This inflation typically runs around 1.9 – 2.3% per year, depending on the type of average you use.

That all flows through to property prices.

#2 – Incomes go up

Incomes also go up over time ... often incomes rise faster than inflation.

As people earn more, they can borrow more. This means they can afford a bigger mortgage and pay more for a property.

Since 2000, the mean household income has risen 4.1% per year. That’s the average increase.

And half the time the average household income has risen between 3.3 - 5.2%.

There’s also something unique about how we buy houses.

It’s one of the only purchases where people ask the bank: “What’s the maximum I can borrow?” … and then use that as the budget.

You wouldn’t walk into a restaurant, look at the most expensive meal you can afford, and say: “I’ll have the caviar-stuffed lobster.” 

But with houses, many people do.

So, as incomes rise, people stretch to buy more expensive homes.

So we’re at 2% for inflation and another 2% for income growth. That gives you about 4% house price growth per year (on average). 

More from Opes:

• House price predictions - Where are house prices going?
• The 4 big assumptions to look at when you buy an investment property
• The ultimate guide to capital growth

#3 – Housing shortage and migration

Then there’s the supply and demand factor. 

Things like New Zealand’s strong migration, and a growing population.

On top of that, many banks still say NZ has a housing shortage. 

So, we tend to add another 1% to our house price growth assumption and an extra 1% for Auckland. 

Funnily enough, when economist Tony Alexander was last on the Property Academy Podcast, he made the same point.

Why we don’t overhype these numbers

I also like to use 5% and 6% because they are lower than past increases in house prices. 

In the average year, NZ house prices (excluding Auckland) have risen 6.3%, but our benchmark is 5% for areas outside Auckland. 

Now, could we use 6.3% (the average) in our forecasts? Yes. 

Most property companies would. 

We don’t. Because if we use a simple average, half our investors will do better than average, half will do worse than average. 

That’s what an average is.

To me, that’s not good enough, because then half our clients would underperform our projections. 

I don’t just want half of the investors who work with Opes to close their Wealth Gaps, I want a super majority – way more than half. 

So, these lower benchmarks aim for more certainty, not just average performance.

How often has the housing market met the benchmark?

Pick a random month since 1992 and buy a property in Auckland and hold it for 10 years. 91% of the time it would have grown by 6% a year or more. That’s compounding. 

So 9 out of 10 investors would have received 6%, and so we’re comfortable this is a robust assumption. 

In Christchurch, our benchmark is 5% growth per year. 

Again, pick a random month since 1992, buy a property in Christchurch, and hold it for 10 years. 

65% of the time it would have grown by 5% a year or more. Almost 2 out of 3 investors. 

This chart shows how often New Zealand’s big cities met our benchmark (if you held for at least 10 years). It’s not even close – most of the time the markets perform well above this benchmark.

So, if you’re looking for a ballpark figure to plug into your calculations, these are robust numbers to use.

Here’s what I said to the FMA

Earlier in 2025, the Financial Markets Authority (FMA) paid us a visit. 

They came in for a monitoring review. This is a normal visit to see how financial advisers are operating, and I loved talking numbers with them.

One question that came up (I knew it would) was: “What evidence do you have that 5% or 6% is a good number to use?”

As well as sharing the stats you’ve read on this page, I also mentioned that I’ve deliberately rounded the numbers.

We don’t say house prices might go up 4.73% or 5.21% or 7.01%. 

Those numbers feel precise, so they might make you think: “Wow, that must be the right number to use! It’s down to 2 decimal places.” 

But no-one knows how much house prices will go up or down to the decimal point, so I think using a very specific number with lots of decimal points could be a bit misleading. 

By using a round number like 5% or 6%, that tells you: “This is a ballpark.” It’s an assumption; it’s not a perfect crystal ball prediction.

I don’t like your numbers … can I use my own?

You might think: “Ed, I get what you’re saying, but when I run my numbers, I want to assume that house prices go up by 3% or 4%.”

That’s totally fine. When you work with a financial adviser at Opes, you can use whatever growth rate you feel comfortable with. 

If you’re using Opes+ you can also change all the main assumptions – including how fast house prices will go up.

Whatever number you choose, just make sure it’s grounded in reality — not hype. Your Wealth Plan depends on it.