According to the Real Estate Institute of New Zealand’s (REINZ) leading house price index, which is used by the Reserve Bank, home prices nationally have collapsed back to early 2018 levels in real terms following a near five-year decline:
Chart by Justin Fabo from Antipodeam Macro
New data from Cotality likewise shows that New Zealand’s house price crash has reasserted itself following five consecutive months of decline.
Over the August quarter, Cotality recorded a 1.3% decline in values across New Zealand, as well as a 1.0% annual fall.
Auckland and Wellington have led the decline.
Auckland’s dwelling values fell by 1.7% over the quarter and by 2.6% annually, whereas Wellington’s values were down by 2.2% over the quarter and by 2.7% annually.
National dwelling values are now down a hefty 18.2% from their peak and are tracking just 15% above their March 2020 level.
Given CPI inflation of 29% over the same period, the data implies that values are down by around 14% since March 2020.
As illustrated above, Auckland (-24.5%) and Wellington (-27.2%) have led the peak-to-trough decline in dwelling values.
Cotality NZ Chief Property Economist, Kelvin Davidson commented that New Zealand remains firmly a buyers’ market amid “economic uncertainty, rising mortgage rates and a high level of properties available for sale”.
“The result is a market where sales activity has gradually slowed through 2026 and property values have continued to drift lower”, he said. “Most of the heavy price correction occurred in 2022 and 2023, but conditions have remained subdued since then”.
“Overall, the housing market remains in a holding pattern. There’s no sign of a sharp downturn, but equally there’s no obvious catalyst for stronger growth in the near term”.
The sharp price decline has also returned housing affordability metrics “to their long-term averages if not a bit lower/better”, Davidson noted.
Overall, he believes the market will remain in a “holding pattern” given “mortgage rates rising and the economy subdued”. The upcoming election has also “added a layer of uncertainty”, according to Davidson.
This suggests that New Zealand home values will move broadly sideways in nominal terms and continue to decline in real inflation-adjusted terms.
As a result, New Zealand’s housing downturn could extend into an unprecedented sixth year.
