Property slump eases in Wellington, but recovery remains elusive

Wednesday, 6 August 2025

The Wellington region’s sharp property drops appear to have tapered off - but there is no sudden upturn in sight.

And the only place in the region that has come out of the last year with a definite rise is Porirua.

Cotality NZ’s latest home value index shows Lower Hutt has risen by 0.3% and Porirua by 0.1% in July.

Porirua was the star of the region over the last year - rising 0.8% while all other areas have dropped.

For July, Wellington City dropped 0.5% to an average price of $878,009, Upper Hutt down 0.4% to $691,241 and Kāpiti Coast down 0.6% to $826,861. Porirua’s average value was now $783,793 while Lower Hutt was at $701,240

Cotality NZ chief property economist Kelvin Davidson said Wellington’s previous sharp downturn in property values seemed to have come to an end, no doubt reflecting the influence of lower mortgage rates.

“But that doesn’t mean an upturn has suddenly emerged. In fact, market confidence levels around the capital seemingly remain low, and property value trends are inconsistent from month to month,” Davidson noted.

And job uncertainty was playing a part across the country.

Unemployment figures due out today were expected to show another rise in those out of work. .

Davidson said the job market uncertainty was currently a key limiting factor.

And it’s not just the public service - the construction industry contributes a big hit - with more than 12,000 job losses in construction in the year to June 2025. More than 1100 construction companies liquidated in the two years to June 2023.

“At the end of 2024, our analysis suggested that 2025 was likely to be a ‘year of conflicting forces’ in the property market, with the upwards influence on house prices from lower mortgage rates counteracted to an extent by headwinds such as an abundance of listings and the weak labour market,” Davidson said.

“That broad theme has proven correct, with regions including Auckland and Wellington remaining soft. Even in more resilient areas such as Hamilton and Christchurch, the picture isn’t that much better.”

Now rising sales activity has started to erode the stock of available listings a touch, probably augmented by some would-be vendors actively withdrawing their listed properties from the market, Davidson said.

He said that could lead to more competitive price pressure later in the year, especially as a greater number of existing borrowers rolled off older, higher mortgage rates and down to current levels.

Nationally there was a –0.2% drop, bringing the median value to $819,921.

Auckland and Dunedin were the weakest of the main centres in July, dropping by -0.6% apiece – with the former also -1.4% down in the past quarter.

Christchurch saw a minor -0.1% decline, although values were still slightly higher - 0.4% - than three months ago while Hamilton saw a 0.4% lift in July, with Tauranga up at 0.9%.

Davidson said his expectations for house sales and prices for the rest of 2025 and into 2026 remained cautious.

“We have recently seen the number of sales return to some kind of normality and this upwards trend may well continue in the near term.”

But he warned market activity levels were not racing away and both buyers and sellers seemingly remained in a measured mood.

“First home buyers and ‘Mum and Dad’ investors are active groups on the purchaser side of the equation at present, but it’s also worth noting that many vendors aren’t rushed at present either – those who are confident about their employment security may well be happy to wait for the price they want.”

The next cash rate announcement was on August 20 and was expected to be cut to 3% while the economy was still struggling to get into its stride off the back of monetary policy easing, he said.

He said previous indications of an increase in national median property values of around 5% might be on the cards in 2025, looked unlikely. In fact, the market may struggle to generate much more than 1-2%.