‘Some degree’ of pressure to sell amid big house price falls, as market looks for glimmers of hope

Saturday, 13 September 2025

House insurance premiums have surged nearly 900% since 2000, with address-based pricing and rising repair costs blamed. Wellington households face the highest average bills at $4589 a year, leaving many struggling to keep cover.

Wellington has been hard hit by the fall in house values, with the city’s west the most affected - down 30% from the peak, QV says.

It’s thought many house sales are being made under “some degree of financial pressure”.

Some commentators are expecting a modest price recovery in 2026, but that could depend on a better outlook for jobs.

“Some degree” of pressure to sell is thought to be part of the reason house prices in Wellington’s western suburbs are 30% below the market peak of early 2022.

Wellington has been hammered more than any other urban area, with prices across the whole metropolitan area down almost 27%, but Auckland has also been hit hard, with prices across much of the region down by around 20%, QV data shows.

Christchurch hasn’t seen the same sort of decline, with prices little different from those at the national peak, but they never climbed to the same sort of heights as values in the two North Island main centres.

Post-peak values have also fallen by between about 15% and 19% in Hamilton, Hastings, Napier and Palmerston North.

The best-performing area is Queenstown, where values are up nearly 17% since the national peak.

QV data shows national house prices falling further in the past three months

Cotality head of research Nick Goodall thought house values were “hovering” at the bottom, amid weakness in the economy and labour markets.

That had flowed through to less confidence in the housing market, but he thought the end of the downturn had “generally finished”. “It’s essentially trying to find a floor,” Goodall said.

He expected to see some recovery in the housing market as the economy improved.

“I think we’re expecting the growth phase to start soon. It has taken longer in places like Auckland and Wellington where local economies are struggling,” Goodall said.

Struggling economies in Auckland and Wellington have contributed to large falls in house values.

Buying a house was becoming more achievable, with housing affordability near 20-year averages, while buyers also had plenty of choice.

Trade Me is hoping a small increase in the national average asking price in August may be an early hint of recovery.

The increase was something that might be more typically seen in September or October, Trade Me customer director Gavin Lloyd said. There was a “little bit of optimism” with the rise coming a bit earlier.

“I guess there is a little bit of positivity. Even though it’s still pretty challenging in markets like Wellington and Auckland, some of the regions seem to be doing okay,” Lloyd said.

“I think we’re going to see a modest recovery. I would hope with a bit more certainty, a couple more cuts to the OCR, some positivity will start to flow through some point next year.”

Karori - a suburb in the western Wellington City area where QV says house values have fallen almost 30% since the 2022 market peak.

In a housing market update on Thursday, Westpac chief economist Kelly Eckhold said there were indications of increasing housing demand as interest rates had come down.

In 2026, the Westpac economists expected a gradual lift in housing market momentum, resulting in price growth of around 5.4%.

“Demand for both owner-occupier and investor housing should strengthen as the broadening economic recovery – and crucially an upturn in the labour market - encourages the formation of new households, including migrant households,” Echkold said.

But it was possible population growth could remain slow, especially if the labour market took longer to recover. A slower rate of household formation would likely mean less upward pressure on house prices.

In Wellington City, the area with the biggest value decline has been the western suburbs, where QV calculates prices are down 29.9% since the peak. That equates to a whopping $400,000 fall in average values.

Reserve Bank Governor Christian Hawkesby talking to reporters in August after the OCR was dropped to 3% - the lowest level in three years.

“The reality is there is some degree of financial pressure to offload with a high proportion of property transactions at the moment,” QV Wellington registered valuer and senior consultant David Cornford said.

“It’s possible areas that are heavy in town housing and with ex-rental stock are showing larger drops than some other areas of the city.”

Ex-rentals with deferred maintenance were struggling and could often be picked up relatively cheaply. In contrast, well-maintained homes were selling strongly.

Real Estate Institute of NZ data shows areas of Wellington where homes are selling fastest are suburbs near the central city - Mt Cook, Brooklyn and Hataitai.

Lowe & Co Realty managing director Craig Lowe thinks Wellington City is nearing the bottom in terms of prices, while the number of houses being sold is “dramatically” up from the “absolute nadir” for sales in 2023.

It was becoming easier to sell, possibly partly because new rating valuations (RVs) in early 2025 had helped sellers accept the reality of the market, Lowe said.

Buyers were looking for houses in good condition that didn’t need work, and first-time buyers were probably the strongest part of the market.

“The investment market, I would say, is the worst I have seen it in 25 years,” Lowe said.

Tommy’s Real Estate agent Alexia Stoddart dismissed suggestions the Wellington property market was gloomy.

Tommy’s recently sold three houses that received multiple offers well above the buyer inquiry price, to cash buyers, she said.

“There’s positivity in the market. There’s good buyers out there. They are pre-approved, have finance sorted, hence why they can be cash offers.”

That positivity included the western suburbs, Stoddart said. In the large west Wellington suburb of Karori, she sold a house recently for $65,000 above the asking price.