Navigating Residential Renovations in NZ’s Economic Climate: A Strategic Approach with Ford Studio
Understanding the Current Economic Landscape
New Zealand’s housing market has seen significant shifts in the past few years, driven by a variety of factors including rising interest rates, increasing construction costs, and changing buyer behaviours. However, with interest rates starting to drop in 2025, the appetite for renovation and home improvement is returning. Homeowners are now looking at how they can add value and improve their homes as affordability concerns shift, and the market stabilises.
At Ford Studio, we continue to believe that strategic renovations remain one of the best ways to improve a home’s value, enhance functionality, and future-proof a property - especially as economic conditions change. But where should you begin?
Challenges Facing Homeowners in 2025:
Decreasing Interest Rates & Lending Opportunities
With interest rates starting to decrease, borrowing power is slowly returning. This shift in the market encourages many homeowners to consider renovations, as lower rates mean more favourable lending conditions, especially for home improvements that add long-term value.
However, while banks may be more willing to lend, it’s still important to budget wisely and plan strategically for renovations to ensure projects remain cost-effective and stay within budget.
Rising Construction Costs
Despite decreasing interest rates, construction costs continue to fluctuate. Material prices, although more stable than in previous years, still face pressure from global supply chains, and labour shortages remain an issue. Homeowners need to choose their renovation scope carefully, focusing on high-impact upgrades that offer the best return on investment.
Shifting Housing Market Trends
As the housing market stabilises, many homeowners are opting to renovate rather than sell. In a market with slower sales, it can be difficult to secure the price they expect, making renovation a more viable option. Homeowners are prioritising energy efficiency, multi-functional spaces, and future-proofing their homes, knowing that these features will increase their home’s value in the long run.
Why Renovating is Still a Smart Investment:
Despite economic challenges, renovations continue to offer strategic benefits. Here’s why:
Increasing Property Value Without Overcapitalising
With interest rates lower, many homeowners are choosing to modernise their homes rather than move, improving both aesthetics and functionality. Thoughtful upgrades - such as reconfiguring layouts, increasing natural light, or adding a secondary dwelling - can significantly increase a property’s worth without overcapitalising.
Ford Studio Approach: We assess your home’s existing strengths and constraints, ensuring renovations align with market demand and add long-term value.
Energy Efficiency & Future-Proofing
With rising power costs, energy-efficient designs are becoming more important. Features like passive heating, improved insulation, and smart ventilation not only reduce long-term costs but also make homes more comfortable year-round.
Ford Studio Approach: We integrate sustainable design principles into every project, from window positioning for natural light to high-performance insulation and innovative heating solutions.
Adapting Homes to Changing Lifestyles
Post-pandemic, there’s been a significant increase in the demand for multi-functional spaces, including home offices, self-contained flats, and flexible living areas.
Ford Studio Approach: Whether it’s a self-contained rental unit, a home extension, or a reimagined floor plan, we help homeowners design spaces that evolve with their changing needs.
High-Value Additions: Pools, Pool Houses, and Granny Flats
For those looking to significantly boost property value, adding a pool, pool house, or granny flat can be a lucrative investment. These features not only enhance lifestyle quality but also provide strong returns.
Pools & Outdoor Entertaining Spaces
Real estate data suggests that a well-designed pool can increase a home's value by up to 15%, depending on location and quality. With New Zealanders increasingly prioritising indoor-outdoor flow, a luxury pool area with landscaping and alfresco spaces is highly desirable.
Ford Studio Approach: We design integrated outdoor living spaces, ensuring pools complement the home’s architecture while providing functional and aesthetic benefits.
Pool Houses & Granny Flats
Self-contained units or pool houses offer versatility, serving as guest accommodations, home offices, or short-term rental spaces. Given NZ’s growing demand for rental properties, adding a minor dwelling can generate passive income while boosting home value.
Supporting Evidence: Properties with secondary dwellings often see a 20-30% higher resale value, particularly in Auckland and high-demand coastal areas.
Ford Studio Approach: We design high-end, functional secondary dwellings, ensuring they comply with local zoning laws while maximising space efficiency and aesthetics.
The Holiday Home (Bach) as a Strategic Investment
Coastal and holiday homes have remained resilient in New Zealand’s fluctuating economy. Renovating a bach can be a smart way to:
Increase rental income potential
Improve long-term asset value
Enhance personal lifestyle use
Why Baches Hold Strong Value
Coastal properties remain in high demand, particularly in regions like Waiheke, the Coromandel, and Queenstown. Short-term rental demand (Airbnb, Bookabach) remains strong, making a well-designed bach a high-yield asset.
Ford Studio Approach: We help bach owners design low-maintenance, high-impact renovations that improve usability while aligning with coastal or rural settings.
How Ford Studio Can Help You Renovate with Confidence:
Feasibility & Master Planning
Before committing to a renovation, we conduct a thorough feasibility study to assess:
What is structurally possible within your budget?
Which design changes will add the most value?
How can we optimise the process to avoid unexpected costs?
Cost-Efficient Design & Material Selection
Our designs focus on cost-effective solutions without compromising quality. Whether it’s clever space planning, selecting durable yet affordable materials, or prioritising energy efficiency, we guide clients through every decision.
End-to-End Project Management
Renovating can be complex, but we simplify the process by handling:
Council approvals & building consents
Observation during construction
Detailed design documentation to avoid costly mistakes
Final Thoughts: Why Work With Ford Studio?
Renovating in today’s economy requires smart planning, strategic budgeting, and expert guidance. At Ford Studio, we bring:
Years of experience in high-end residential design
A client-first approach to maximising value
Cost-conscious solutions that don’t sacrifice aesthetics
End-to-end project management to simplify the process
If you're considering a renovation, let’s chat. We’ll help you navigate the process, optimise your investment, and create a home that truly works for you—now and into the future.
Get in Touch Today: Book a consultation with Ford Studio to discuss your vision and get expert guidance on how to make it a reality.