Source: Cotality
Property values in Aotearoa New Zealand edged down by -0.2% in August, the fifth monthly fall in a row, according to Cotality NZ’s latest hedonic Home Value Index (HVI).
National values have dropped by -0.6% so far in 2025, with the modest gains seen late last year and early this year now negated.
The nationwide median now stands at $809,113, still -17.2% down compared to the January 2022 peak, and also the lowest level since August 2023.
Cotality NZ Chief Property Economist Kelvin Davidson said the August result was yet another reminder that market conditions remained soft over Winter.
“Given the continued economic weakness, further increases in unemployment, and subdued confidence, it’s no surprise that property values are treading water. While the downturn after the post-COVID boom has now petered out, steadier growth has yet to materialise.”
“That said, what might be discouraging for property owners and sellers is beneficial for those buyers on the other side of the coin.”
“In particular, we’re seeing continued strength from first home buyers, and a rising market share for mortgaged multiple property owners too.”
“That includes the cliched ‘Mum and Dad’ investors who are no doubt enjoying lower mortgage rates and reduced top-ups on their rental properties.”
“The psychology and mindset around house prices can change quickly, and we’ve seen that before. But right now, caution is the dominant theme, and with unemployment not expected to be at its peak just yet, it’s unlikely that many people will be rushing out to bid up house prices aggressively over the rest of 2025.”
Across the main centres, Tāmaki Makaurau Auckland was down by -0.5% in August, with Te Whanganui-a-Tara Wellington and Kirikiriroa Hamilton both seeing a more modest -0.1% fall. Tauranga was unchanged, with Ōtautahi Christchurch up by +0.2% and Ōtepoti Dunedin recording a +0.4% lift.
Tāmaki Makaurau Auckland
Tāmaki Makaurau Auckland’s property values have certainly endured a testing Winter, with falls across the board in August, the third month out of the past four in which this has occurred (only July missed the cut, with only Rodney just holding steady).
August’s falls were fairly uniform across the sub-markets, ranging between -0.4% and -0.6% in Auckland City, Manukau, Papakura, North Shore, and Waitakare, with Franklin and Rodney a little weaker still.
Over a broader three-month period, the falls range from -1.5% to -2.0%, although Rodney’s has been a touch smaller at -1.3%. Each sub-market also still sits around -20% to -25% below the previous peak.
Mr Davidson added: “The stock of available listings around Tāmaki Makaurau has begun to drift downwards, but it’s starting from a high level, and the latest property value figures re-emphasise that it’s still a buyer’s market in our largest city. For example, the Cotality Buyer Classification figures show that first home buyers and mortgaged multiple property owners are enjoying conditions at present and taking a high or rising share of purchasing activity.”
Te Whanganui-a-Tara Wellington
August was also subdued across the wider Te Whanganui-a-Tara Wellington area, with Kāpiti Coast and Te Awa Kairangi ki Uta Upper Hutt both down by -0.6%, and Porirua slipping -0.3% lower. Wellington City itself was flat, but it has still dropped by -3.4% over the past 12 months.
The falls from peak remain significant across the region too, ranging from around -22% in Kāpiti Coast and Porirua, to more than -25% in Wellington City and Te Awa Kairangi ki Tai Lower Hutt.
“Te Whanganui-a-Tara Wellington’s previous sharp downturn in property values has petered out, but the remnants of that phase haven’t disappeared altogether. Indeed, although the rate of decline has been much slower, Wellington City itself has still fallen further in the past 12 months, with lingering employment uncertainty a continued challenge,” Mr Davidson noted.
Regional results
The tentative evidence that a touch more economic resilience in provincial areas was also supporting property values continued from July and into August, with Whakatū Nelson, Waihōpai Invercargill, and Ngāmotu New Plymouth all rising by at least +0.5%.
That said, there’s still patchiness from month to month, with Tūranganui-a-Kiwa Gisborne, Heretaunga Hastings, and Ahuriri Napier all down by -0.5% or more.
“We shouldn’t get carried away with any flow-on effects from NZ’s two-speed economy into provincial property outperformance, not least because some of the regions have their own challenges in terms of losing young people overseas during this current phase of strong migrant departures.”
“That said, the longer the primary sector continues to grow strongly, the more cash will find its way into our regional towns and cities, giving property values some key support.”
Property market outlook
Looking ahead, Mr Davidson noted: “It wouldn’t be a surprise if the final few months of the year remain consistent with the ‘conflicting forces’ theme that we’ve been reiterating throughout 2025. That is, the support from lower mortgage rates, but the headwinds of a weak economy and elevated levels of listings on the market.”
“That said, property sales volumes have basically ‘normalised’ and should rise further in 2026 as the lagged effects of lower mortgage rates continue to flow through – with more existing borrowers repricing their loans down to current interest rates. Those interest rates themselves may also drop further as the Reserve Bank pushes through more official cash rate cuts.”
“Housing affordability also looks a bit more comfortable now, and the unemployment rate is projected to start easing downwards gently in the first few months of next year too, with the stock of listings also potentially drifting lower.”
“Adding all of this together, property values may be poised to rise a little more clearly in 2026. But a fresh boom doesn’t look likely, especially given the debt to income ratio rules and Government measures to ramp up housing supply,” Davidson concluded.
For more property news and insights, visit www.cotality.com/nz/insights.
Notes:
The Cotality Hedonic Home Value Index (HVI) is calculated using a hedonic regression methodology that addresses the issue of compositional bias associated with median price and other measures. In simple terms, the index is calculated using recent sales data combined with information about the attributes of individual properties such as the number of bedrooms and bathrooms, land area and geographical context of the dwelling. By separating each property into its various formational and locational attributes, observed sales values for each property can be distinguished between those attributed to the property’s attributes and those resulting from changes in the underlying residential property market. Additionally, by understanding the value associated with each attribute of a given property, this methodology can be used to estimate the value of dwellings with known characteristics for which there is no recent sales price by observing the characteristics and sales prices of other dwellings which have recently transacted. It then follows that changes in the market value of the entire residential property stock can be accurately.
