Market remains in a subdued state
New Zealand’s housing market remains in a subdued state, despite government moves to welcome back foreign buyers at the luxury end.
With property values slipping for the fifth month in a row and economic headwinds persisting, mortgage advisers are asking: what will it take to turn things around?
The latest NZHL Property Report by Tony Alexander shows seasonal improvement, with more buyers attending auctions and open homes, but prices remain under pressure and the market stays subdued.
Here are the five key trends shaping the market this week, according to Kelvin Davidson (pictured), chief economist at Cotality NZ.
Winter proves cold for property values
The latest Cotality Home Value Index recorded a 0.2% fall in New Zealand's median property value in August. While the decline is modest, it marks the fifth consecutive drop, erasing gains made in late 2024 and early 2025.
Auckland led the downturn with a 0.5% fall, while Wellington and Hamilton each slipped by 0.1%. Tauranga was flat, but Christchurch and Dunedin saw increases of 0.2% and 0.4%, respectively. Nelson, New Plymouth, and Invercargill also posted value gains.
Looking beyond the month-to-month numbers, winter has been another sluggish period for property values.
“Market confidence levels [are] patchy and the weak economy and labour market still key restraints,” Davidson wrote in a OneRoof analysis.
Still, there are some positive signs.
“Property sales are rising and starting to bring down the stock of listings on the market,” Davidson said.
As more borrowers refinance from higher, older mortgage rates to current levels, the groundwork may be laid for a rise in property values in 2026. However, with debt-to-income (DTI) restrictions now in place, a fresh boom seems unlikely.
Foreign buyers return – but impact will be limited
The government’s recent change to the Active Investor Plus visa now allows foreigners to buy or build a single dwelling in New Zealand valued at $5 million or more. According to Cotality, there are about 7,000 such properties nationwide – 4,300 in Auckland and 1,250 in Queenstown.
But this move is unlikely to transform the market. Those 7,000 dwellings represent just 0.4% of the national housing stock, and only those listed for sale are eligible.
“Once you account for all that, you’re looking at maybe 200-300 extra transactions a year, and only in upper-end areas,” Davidson said. “Yes, there might be a price effect in those fancy suburbs, but elsewhere the rule change will be largely irrelevant.”
Dwelling consents hold steady
Another reason for caution about a rapid house price rebound in 2026 is the steady level of new construction. While not a glut, the number of new dwellings consented in July was 3% lower than the same month last year, according to Stats NZ. However, the annual total remains in a tight range of 33,500 to 34,000 – much higher than in previous downturns.
Net migration remains weak
Stats NZ will release July’s migration figures this week. New arrivals have been dropping, while departures – especially among young Kiwis – remain high. Net migration is trending downward, though the rate of decline has slowed. This ongoing weakness is a key reason why property rents remain sluggish.
Economic hopes rest on August data
All eyes are on Friday’s release of August updates for manufacturing and retail. There were hints of improvement in July, so a continued upturn would be welcome news for both the housing market and the broader economy, OneRoof reported.
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