Buyers hold the upper hand, with first-home buyers best placed
New Zealand property values fell 0.4% in October, the seventh consecutive monthly decline, as the market heads into the general election in a subdued state.
Cotality NZ’s Home Value Index put the national median value at $790,987, its lowest point since December 2020. Values are down 2.3% on a year earlier and 19.1% below the January 2022 peak.
Buyers keep the bargaining power
Cotality NZ chief property economist Kelvin Davidson (pictured) said sales volumes had drifted lower through 2026, while the spring lift in new listings had kept the stock of unsold homes high.
He said that “provided that would-be buyers are confident about their own job security and can satisfy the bank too, they remain in a strong bargaining position.”
Davidson noted that few vendors are under pressure to sell, given that employment has held up relatively well. Mortgagee sales numbered only about 400 over the past year, well below the more than 2,600 recorded at the worst point after the global financial crisis.
He said the RBNZ’s official cash rate hold in late October gave borrowers only temporary relief. The election, possible drawn-out coalition talks and the usual summer slowdown could stretch the soft patch into 2027. Lending data points the same way, with Centrix finding approved new mortgages 16% lower in the September quarter even as home loan enquiries rose 14.4%.
Main centres mixed, Auckland and Wellington weaker
Hamilton, Tauranga and Christchurch held steady in October, and Dunedin slipped just 0.1%. Auckland fell 0.7%, with every sub-market down, and Wellington dropped 0.9%.
Davidson linked Auckland’s softness to a subdued services economy and continued growth in new housing supply, particularly townhouses. In Wellington, restrained public sector spending and a shrinking city population have weighed on demand.
Some provincial centres bucked the trend. Queenstown rose 0.8% in October, and along with Invercargill it is one of only two main urban areas where values are higher than a year ago.
Outlook favours first-home buyers
Cotality expects sales and prices to stay sluggish for at least the next 12 to 18 months. It sees further mortgage rate rises as more likely than stability or cuts, and says a strong economic upturn in 2027 isn’t guaranteed. Davidson added that debt-to-income (DTI) limits are here to stay regardless of the election result.
First-home buyers are already making the most of these conditions, accounting for a record 29.5% share of property purchases in the September quarter.
“All in all, it remains a favourable time to be a first home buyer, while other groups such as movers and mortgaged investors still face some challenges,” Davidson said.
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