Past earthquake experiences in New Zealand indicate that light timber-frame (LTF) residential housing stock in New Zealand could suffer significant damage in major earthquakes, leading to significant downtime and economic losses for the community. It is necessary to develop a rigorous approach to predict seismic damage on LTF residential houses and estimate the subsequent economic losses. This paper provides an overview of recent research advances in the fields of seismic performance assessment and seismic loss models for LTF residential houses in New Zealand. It systematically reviews the evolution of residential houses in New Zealand, experimental and simulation studies of plasterboard bracing walls and LTF buildings, numerical modelling methods currently used for wood shear walls, and prevailing building seismic loss estimation models. In addition, recent technological advancements and current design recommendations relevant to such LTF houses and bracing walls are highlighted. Possible future research directions are recommended to better understand the seismic performance and develop a loss estimation framework for LTF residential houses in New Zealand.