NZ housing market slump deepens

The latest QV House Price Index shows that average home values across New Zealand fell by 0.8% in the three months to the end of August, bringing the national average to $906,977. 

This is just 0.2% higher than a year ago and 13.4% below the market peak of January 2022. 

Among the main centres, Queenstown led with a 2.5% gain, followed by Hastings, Tauranga, Invercargill, and New Plymouth. In contrast, Nelson saw the largest quarterly drop at 3.2%, with Wellington City, Whangārei, Auckland, Hamilton, Napier, Palmerston North, Christchurch, and Dunedin also recording declines.

QV National Spokesperson Andrea Rush said that as spring approaches, the housing market remains subdued, with values continuing to decrease in most parts of the country. 

Rush highlighted that the slump is most pronounced in Wellington, where values are now close to 30% below their peak, and in Auckland, which is down around 20% – a sign of the scale of the correction since early 2022.

“The good news is that with home values coming down and interest rates beginning to ease, affordability is slowly improving for buyers in many areas,” she said. “However, higher living costs, rising unemployment, the broader economic downturn, and stretched household budgets continue to restrict demand.”

ASB reports buying sentiment remains historically strong despite easing, with high inventory and more listings boosting buyer choice. “The proportion…positive…remains around the highest level since July 2011,” said ASB’s Yen Nguyen.

Rush also observed that a steady flow of new townhouse and apartment completions is giving buyers greater choice and helping to limit upward pressure on prices. 

“Buyers are taking longer to commit, and sellers are increasingly having to meet the market,” she said. “Agents report some homeowners are struggling to sell in time to secure their next property, leading to more deals falling through.”

Rush added that net migration has slowed sharply since the post-pandemic peak, with more people now leaving New Zealand than arriving. This is a reversal from the strong inflows that previously helped fuel house price growth. 

She also noted that the impact of new foreign buyer rules will take some time to show in places like Queenstown and Auckland, where most homes priced above $5 million are located.

Auckland: Values down 20% from peak

In Auckland, average values are about 20% below the January 2022 peak, though the extent of the decline varies by area. Rodney has seen a smaller drop of 12.5% (about $175,000), while Waitākere has experienced the steepest decline at 21.7% (about $260,000).

QV Auckland registered valuer Hugh Robson noted that despite a slight lift in sales activity through August, there has been little movement in prices, with all areas seeing values dip in the past three months. 

Robson reported that listing levels are healthy across most suburbs, with a number of new townhouse developments recently completed or nearing completion. Well-located homes with some land are continuing to sell well, while townhouses with little or no land are proving less popular. 

“Buyer sentiment is relatively upbeat, with recent surveys suggesting many see now as a good time to purchase,” he said. 

Robson attributed this to the latest cut to the OCR, lower interest rates, plenty of choice, and a sense that prices may have bottomed out.

Wellington: Steepest value falls in the country

Wellington has experienced the largest value declines since the January 2022 peak, especially in Wellington City – West, where average values have dropped 29.9% (over $400,000). Lower Hutt has also seen significant falls, with average values down nearly $300,000.

QV Wellington registered valuer and senior consultant David Cornford said that good stock is attracting steady interest and often multi-offers, but overall values remain relatively flat while still ticking down across all areas. 

“Well-maintained homes continue to sell strongly, while ex-rentals with deferred maintenance are struggling and can often be picked up relatively cheaply,” Cornford said.

“Most buyers remain cautious and are steering clear of properties that need significant work, but for those with the skills and appetite to take it on, this part of the market presents an opportunity to add value and create equity.

“There does appear to be a little more optimism creeping back into the market.”

Christchurch: Market cools but remains stable

QV Christchurch registered valuer Olivia Brownie reported that the Christchurch housing market has continued to cool through the winter months, which is typical for this time of year, although values are still up annually overall. 

Brownie said that recent weeks have brought a lift in enquiries, with more people preparing to buy or sell as spring approaches. 

“The easing of interest rates may help to get more sales across the line in the coming months, with demand remaining healthy, particularly from first-home buyers,” she said.

Brownie added that local economic fundamentals point to ongoing stability, though national economic conditions could influence momentum.

Regional divergence: Queenstown leads, Carterton and Nelson lag

Regional divergence continues, with most areas now experiencing value decreases. 

Queenstown Lakes District remains the country’s most resilient market, leading national growth with the highest average value at $1,860,392 – 16.8% higher than the January 2022 peak. Mackenzie District is also on the rise, up 5.8% this quarter and 17.9% since the peak.

Hamilton Central values rose 6.8% this quarter, defying the wider city trend, QV reported. 

QV Hamilton senior registered valuer Marshall Wu attributed this to affordability, proximity to the CBD, strong rental demand, and new townhouse developments.

Carterton recorded the largest drop over the past three months, reflecting the broader downturn across the Wellington region. Nelson values fell 3.2% this quarter. 

QV Nelson/Marlborough manager Craig Russell described the market as “flat rather than falling,” with steady demand for tidy $500,000-$800,000 homes. 

However, properties with issues are struggling to sell, while those above $1 million often take six months or more and need price cuts to attract interest. Russell also pointed to recent job losses and the lack of benefit from higher dairy prices compared to other regions.

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