It's been a "patchy performance" so far – here's where to look for potential signs of growth
The property market has remained stagnant over the three months to September, with sales activity slowly rising but property values largely flat, according to new analysis from Cotality's Mapping the Market.
Cotality noted a “patchy performance” split across suburbs and property types. More than half of all suburbs recorded declines in standalone house values, though conditions may be building for modest growth next year.
Overall, 56% of suburbs saw declines in standalone house values. Auckland saw price declines of nearly 4% for various suburbs including Takapuna and Clevedon. Dunedin, Christchurch, Tauranga and Wellington saw modest increases of 2-3% in some suburbs.
For townhouses, lower-priced regions of the North Island such as Paihia, Taihape and Otangarei in Whangarei saw the steepest falls of at least 5%.
Commenting on August performance specifically, Cotality property market commentator Nick Goodall (pictured) said that you can’t rely on a single statistic to assess the market’s performance or future prospects.
“While the physical supply and demand balance over short periods does not explain all changes in property values, it is obviously important,” Goodall said.
“Available listings, the strength of local economies, and affordability calculations also play a significant role.”
He noted that stock is still “above average”, despite some steep drops in areas such as Southland and Gisborne. These will be the areas to keep an eye on for the first signs of growth.
“With winter behind us, the seasonal dip in listings looks to have ended,” he said. “While total stock is still below this time last year, it’s above the recent average. The spring selling season, typically peaking in November, will be key – especially in regions with higher choice.
“If demand picks up, and especially if it outweighs new listings coming to the market, this could lead to upward pressure on prices, shifting buying power towards sellers. However, the weak economy and labour market may limit how strong the next growth cycle becomes.”
Future growth paints a murky picture
Most of the figures coming out this month only confirm the sluggishness that has persisted throughout most of the year. A substantial bounce-back is hard to predict in the near-term, though chief property economist Kelvin Davidson said there are some signs of things starting to turn.
He noted that with affordability returning to normal levels, mortgage rates falling and unemployment rates also set to fall, we can expect to see a little modest growth in 2026.
Goodall noted that we also have more stimulus from the Reserve Bank to come, as clearly signalled in its last meeting.
“The Reserve Bank seems to be losing patience with the sluggish economy,” Goodall said.
“In August, they signalled a further two 25 point cuts, likely this year. While inflation risks remain, they expect CPI inflation to settle around 2.5% in the longer term, giving them confidence to stimulate growth.”
He noted that lending competition is also “fierce”, giving mortgage advisers plenty to do as borrowers increasingly consider switching banks for a better deal. June and July saw record numbers of borrowers switching – over 4,000, representing around $2.6 billion in loans.
“Another key development is the Government’s new policy for foreign buyers,” Goodall said.
“Golden visa holders can now purchase or build one home with $5 million or more. While this won’t impact most of the market with only around 7000 properties nationwide reaching that threshold, Queenstown may see more spillover, 6% of homes exceed $5 million.”
Overall, there are patches of promise here and there – but don’t expect a boom anytime soon.
