Fragmented recovery replaces nationwide boom
New Zealand’s post-COVID property landscape has entered a more fragmented phase, with new analysis from Cotality NZ highlighting stark regional divergences in performance and recovery.
While national indicators suggest a stabilisation in property values, Cotality chief property economist Kelvin Davidson (pictured) said the underlying regional data paints a much more complex picture.
“Affordability remains a key pillar of housing demand, and in many South Island regions we’re seeing that balance become a little more favourable for buyers,” Davidson said.
The data showed that some areas have climbed back to or exceeded their previous highs, while others—particularly in Auckland and Wellington—remain well below peak levels reached during the COVID-era housing boom.
Some regions rebound, others still lag 20% or more
Cotality’s latest hedonic Home Value Index revealed that New Plymouth, Westland, and Kaikoura all hit new record highs in April, a sign that recovery is taking hold in select regional markets.
However, the data also showed that 13 areas remain more than 20% below their peak values, with the majority located in the Auckland and Wellington regions. Notable declines include:
- Lower Hutt and Upper Hutt at -24%
- Wellington City at -23%
- Porirua, Waitakere, Papakura, and Manukau between -22% and -23%
- Wairoa (-21%), along with rural Wellington areas like South Wairarapa and Carterton
South Island affordability stands out
A north-south split has emerged, with South Island areas showing significantly better mortgage affordability. According to the analysis, areas like Grey, Buller, Clutha, and Gore have mortgage payments at less than 30% of gross median household income, compared to the national average of 46%.
In contrast, Tauranga and Kapiti Coast remain much less affordable, with mortgage payments still at 54% of household income.
Regional standouts: Hamilton, Queenstown, Canterbury
Several regions are outperforming others in terms of resilience and value recovery:
Hamilton holds firm
Hamilton has proven more resilient than other North Island cities, falling just 10% from its peak and showing renewed strength with +2.1% growth since January, matching Christchurch and ahead of Auckland (+0.9%) and Tauranga (-0.4%).
Davidson noted that factors like improved roading connectivity and a buoyant surrounding rural economy may be supporting this strength.
Queenstown remains appealing despite price tag
Queenstown’s median value stands at $1.66 million, making it the highest in the country ahead of North Shore’s $1.31 million. Yet, it has seen only a 5% decline from its peak, maintaining its appeal among wealthy domestic buyers and eligible international investors.
Canterbury shows broad resilience
Out of the 17 areas that are within 5% of their peak, eight are in Canterbury, including Christchurch, Waimakariri, Ashburton, and Timaru. This strength comes despite high levels of new housing supply, indicating robust demand matching the pace of construction.
Outlook for 2025: Mixed prospects for major centres
Although many of New Zealand’s largest urban centres remain below peak, a return to widespread growth isn’t guaranteed. Structural pressures such as new townhouse supply in Auckland and fiscal constraints in Wellington may continue to suppress short-term recovery.
Still, Davidson expects that lower mortgage rates and early signs of economic improvement could support broader growth into 2025.
“Affordability remains a key pillar of housing demand, and in many South Island regions we’re seeing that balance become a little more favourable for buyers,” Davidson said.
With these factors in play, buyers and investors will be watching closely for the next wave of regional momentum.
