The long cold winter of the property market

Thursday, 4 September 2025

Winter has brought a definite chill to the property market with home values falling for the fifth month in a row.

Cotality NZ’s latest home value index showed national values dropped by 0.6% so far in 2025 to the lowest it’s been for two years.

Cotality NZ chief property economist Kelvin Davidson said any modest gains seen late last year and early this year had now been negated. The nationwide median now stands at $809,113, still down 17.2% compared with the January 2022 peak, and also the lowest level since August 2023.

Wellington still tops the country for the biggest value drop since the peak - down 25%. And August’s figures show another 0.1% drop for the month.

Kāpiti Coast and Upper Hutt were both down by 0.6%, and Porirua slipped 0.3%. Wellington City itself was flat, but it has still dropped 3.4% in value over the past 12 months. The city had no change in the last month.

Davidson said the falls from the peak of the property market were significant, with Kāpiti Coast and Porirua losing 22% in value, and more than 25% in Wellington City and Lower Hutt.

The current median value across the region is $796,918.

The previous sharp downturn in property values in the region had petered out, Davidson said.

“But the remnants of that phase haven’t disappeared altogether. Indeed, although the rate of decline has been much slower, Wellington City itself has still fallen further in the past 12 months, with lingering employment uncertainty a continued challenge.”

Across the main centres Auckland was down by 0.5% in August, with Hamilton seeing a more modest 0.1% fall. Tauranga was unchanged, while Christchurch was up by 0.2% and Dunedin recorded a 0.4% lift.

Auckland’s property values had falls across the board in August, the third month out of the past four in which this has occurred.

In the different super city areas, all fell between 0.4% and 0.8%, ranging between -0.4% and -0.6% in Auckland City, Manukau, Papakura, North Shore, and Waitākere, with Franklin down 0.7% and Rodney a little weaker still, down 0.8%.

Over a broader three-month period, the falls ranged from 1.3% to 2.0%, although Rodney’s was a touch smaller at 1.3%. Each sub-market also still sits about 20% to 25% below the previous peak.

Davidson said the stock of available listings around Auckland had begun to drift downwards, but was already starting from a high level.

The latest property value figures re-emphasised that it’s still a buyer’s market in our largest city, he said.

The August result was yet another reminder that market conditions remained soft over winter.

“Given the continued economic weakness, further increases in unemployment, and subdued confidence, it’s no surprise that property values are treading water. While the downturn after the post-Covid boom has now petered out, steadier growth has yet to materialise,” Davidson said.

What might be discouraging for property owners and sellers was beneficial for those buyers on the other side of the coin.

“In particular, we’re seeing continued strength from first home buyers, and a rising market share for mortgaged multiple property owners too.

“That includes the cliched ‘Mum and Dad’ investors who are no doubt enjoying lower mortgage rates and reduced top-ups on their rental properties.”

In the regions, they were seeing a touch more economic resilience in property values through August with Nelson, Invercargill, and New Plymouth all rising by at least 0.5%.

Meanwhile Gisborne was down 0.5% and Hastings, and Napier dropped by 0.6%.

Looking ahead, Davidson said it wouldn’t be a surprise if the final few months of the year remain consistent with the “conflicting forces” theme from throughout 2025.

He said property sales volumes had basically normalised and should rise further in 2026 as the lagged effects of lower mortgage rates continue to flow through – with more existing borrowers repricing their loans down to current interest rates.

Those interest rates themselves may also drop further as the Reserve Bank pushes through more official cash rate cuts.

He said housing affordability also looked a bit more comfortable now, and the unemployment rate was projected to start easing downwards gently in the first few months of next year too, with the stock of listings also potentially drifting lower.

The next official cash rate announcement was due on October 8.