Sales up, but house price growth still limited
New Zealand’s residential property market maintained momentum in May, with sales volumes tracking above average for the third straight month, according to Cotality’s June Housing Chart Pack.
Sales activity – including both private and agent-facilitated transactions – rose 16% compared to May 2024, marking the 24th annual increase in the past 25 months. The total number of sales reached 8,218, around 5% above the 10-year May average.
“Property sales have been gradually trending upwards for around two years now, and activity is back at normal levels, or even slightly above,” said Cotality chief property economist Kelvin Davidson (pictured).
“It’s not a boom, but it’s clear that confidence is slowly returning, undoubtedly supported by falling mortgage rates.”
Listings remain elevated despite seasonal trends
Despite the lift in transactions, high listing volumes continue to weigh on price growth. Davidson noted that while new listings are following seasonal trends, April’s extended holidays caused a temporary dip.
“New listings have generally tracked in line with typical seasonal patterns this year, though April’s extended holiday break did cause a temporary dip. As the market now enters the traditional winter lull, listing activity is likely to remain muted until it picks up again in spring,” he said.
While some areas are now seeing stock decline, overall market inventory remains high.
“While it has started to come down, the total number of properties listed on the market is still 20% above the five-year average, and that’s putting a lot of the negotiating power in buyers’ hands,” Davidson said.
“Most areas are now showing a decline in total properties listed for sale compared to the same time in 2024, although Canterbury and Otago haven’t quite joined the club just yet.”
Market snapshot: Key stats from June
- New Zealand’s total residential property market is valued at $1.64 trillion.
- The CoreLogic Home Value Index fell 0.1% in May; the three-month change also registered a 0.1% dip.
- There were 85,395 residential sales in the 12 months to May.
- Total listings sat at 29,443 in May, still elevated despite recent declines.
- Gross rental yields rose to 3.8% – the highest since 2015–16.
- The pace of rental growth has slowed, influenced by falling net migration and higher rental stock.
- Inflation has returned to the RBNZ’s 1–3% target band.
- Following the May cut, the Official Cash Rate is now 3.25%.
- RBNZ data shows borrowers with fixed-rate mortgages are paying an average of 5.9%, though current market rates are about one percentage point lower.
House price recovery to remain subdued in short and long term
Elevated listings continue to suppress short-term house price growth, while economists also warn that a full recovery to previous peaks could take years.
“While we’re starting to see listings come down, they’re still well above average in many markets. That means price growth is likely to remain contained in the short term,” Davidson said.
The Cotality economist noted that home values had risen just 0.5% so far in 2025 and remained 16% below their 2021 peak.
“At a 5% annual growth rate... it’s going to take about three years from here,” Davidson said. “But once you get down to 2% or 3%, it’s going to take quite a bit longer, five or six years.”
Gareth Kiernan, Infometrics chief forecaster, offered a similar long-term view, telling RNZ that house prices in real terms could still be 20% below the 2021 peak by mid-2030, despite likely surpassing that level nominally in 2029.
Davidson also pointed to tighter lending rules as a factor likely to delay the rebound.
“There’s always been explanations for why this cycle could take a bit longer than it did back then,” he said, referring to the post-GFC recovery period.
