Property Market Analysis – NZ’s regional property markets diverge since peak – Cotality

New analysis from Cotality reveals that while some regional markets have already surged past previous highs, others — particularly in parts of Auckland and Wellington — remain well below their cyclical peaks.

In fact, over a dozen areas are still more than 20% off their highs, highlighting how uneven the past few years have been across the country.

As mortgage rates ease and affordability improves in select locations, this Pulse takes a closer look at the forces shaping these regional variations — shedding light on affordability trends, economic drivers, and standout performers such as Hamilton, Queenstown, and much of Canterbury.Some areas are back to peak, others languishing

Cotality’s latest hedonic Home Value Index shows there were three areas that set their own new record highs for property values in April – New Plymouth at $711,699, Westland at $493,500, and Kaikoura at $775,443. While the early signs of growth have recently re-emerged in many other parts of the country – driven by lower mortgage rates – the gap compared to where property values were at the peak remains significant.Indeed, 13 areas still have property values more than 20% below the peak, all of them either in the Auckland or Wellington regions, apart from Wairoa (-21%).

Both Lower Hutt and Upper Hutt sit at -24% compared to the peak, with Wellington City at -23% and Porirua -22%. Waitakere is -23%, with Papakura and Manukau at -22% apiece. ‘Rural’ areas of Wellington Region such as South Wairarapa and Carterton sit at -21%.

A story of South Island affordability?

Another distinct trend that stands out is the north-south split – with the South emerging as a clear winner when it comes to affordability.

Take areas such as Grey, Buller, Clutha, and Gore, where the current figure for mortgage payments as a percentage of gross median household income is less than 30% (versus 46% nationally).

By contrast, Tauranga’s mortgage affordability measure is still 54% and Kapiti Coast sits at the same level.

“Affordability remains a key pillar of housing demand, and in many South Island regions we’re seeing that balance become a little more favourable for buyers,” said Kelvin Davidson, Chief Property Economist at Cotality NZ.

Areas of interest

Hamilton’s recent strength. Compared to the other main centres in the North Island, Hamilton hasn’t fallen as far (-10% from the peak) in the past three years or so and has been showing stronger signs of growth more recently too.

Since January, values are up by +2.1% in Hamilton, matching Christchurch’s figure, and ahead of Auckland at +0.9% and Tauranga (which has edged down by -0.4%). The buoyancy of the surrounding rural economy at present may be supporting Hamilton’s market, with other factors potentially including the increased connectivity to Auckland via improved roading.

Queenstown’s continued prominence. Despite an elevated median value of $1.66m, well ahead of second-placed North Shore (Auckland) at $1.31m, Queenstown has remained a reasonably buoyant market – ‘only’ down by 5% from the peak – still appealing to overseas buyers who can navigate the rules and also wealthy domestic investors.

Canterbury’s resilience. Of the 17 areas that are back within 5% of their peak, eight are in Canterbury, including Christchurch, Waimakariri, Ashburton, and Timaru. This comes even though new housing supply volumes have been high across large parts of the Region and signals that property demand has been rising to match construction.

Looking ahead

While some of New Zealand’s largest urban centres remain well below their recent market peaks, a return to strong growth is not guaranteed. Structural factors—such as Auckland’s substantial pipeline of new townhouse developments and ongoing fiscal tightening in Wellington—may continue to weigh on short-term performance.

Nevertheless, improved mortgage affordability and early signs of broader economic recovery are likely to support renewed value growth across many parts of the country in 2025, including Auckland and Wellington. As market fundamentals continue to evolve, buyers and investors alike will be watching closely for signs of renewed momentum.