QV reports stagnant growth amidst economic shifts
New Zealand’s housing market exhibited minimal growth during the summer months, with the national average home value increasing by just 0.5% in the three months leading up to February.
This modest rise brings the average property value to $912,904, reflecting a 1.4% decrease compared to the same period last year and a significant 14.1% drop from the market's peak in late 2021.
James Wilson (pictured), QV operations manager, observed that this period marked the housing market’s most subdued summer in six years.
“After some pretty significant volatility throughout the past half-decade, the housing market now appears to have well and truly stabilised,” Wilson said.
Mixed performance across urban areas
Across New Zealand’s main urban centers, property value changes varied.
- Auckland: Experienced a slight increase of 0.6%, bringing the average home value to $1,245,626.
- Wellington: Saw a modest rise of 0.3%.
- Christchurch: Reported a 0.9% increase.
Notably, Rotorua, Napier, and Invercargill each experienced a 2.1% growth in property values, while Hastings faced a 3.4% decline.
Interest rates, population trends, and property supply
Despite recent reductions in interest rates, the anticipated boost in housing demand has been tempered by other factors.
A slowdown in population growth, coupled with an oversupply of properties on the market, has contributed to the market’s stagnation.
According to Mike Jones, BNZ chief economist, population growth is now trailing behind the growth in the dwelling stock, easing pressure on housing demand. This shift is contributing to rising real estate and rental listings, impacting overall market dynamics.
Affordability challenges persist, particularly in major urban areas, with rising unemployment adding to the cautious sentiment among potential buyers.
New Zealand’s unemployment rate increased to 5.1% in the December 2024 quarter, up from 4.8% in the previous quarter, according to Stats NZ.
Wilson highlighted that while lower interest rates typically stimulate demand, this effect is currently offset by other economic pressures.
He also noted that investors are gradually showing renewed interest in the market, though debt-to-income ratio limits and lingering economic uncertainties may hinder a swift resurgence in investment activity.
First-home buyers: Navigating a complex market
First-home buyers continue to play a significant role in the current housing landscape.
Those with stable employment and secure financial standings are taking advantage of reduced competition from investors.
“Although economic conditions have been remarkably tough on everyone, first-home buyers have benefited in recent times from there being far less competition with investors,” Wilson said.
Anticipating a flat autumn
Looking ahead, the housing market is expected to maintain its current trajectory of minimal growth.
The existing surplus of properties, combined with ongoing economic challenges, suggests that significant price increases are unlikely in the immediate future.
Wilson concluded that the market could experience a relatively flat autumn, with stability prevailing as the dominant trend.
Regional insights
Northland
Kaipara District’s average home value increased by 1.4% to $833,882, while the Far North saw a 1.3% decrease to $693,763. Whangarei experienced a slight decline of 0.5%, bringing its average home value to $715,537.
Auckland
The city's average home value rose by 0.6% to $1,245,626 over the three months ending in February 2025. Six out of seven former local council areas recorded small increases, with Papakura being the exception, experiencing a 1.7% decrease.
Bay of Plenty
Tauranga's average home value increased by 1.6% to $1,020,948, slightly higher than the 1.4% growth recorded in the previous quarter. The wider Bay of Plenty region saw a 1.4% increase, with Rotorua leading at 2.1% growth.
Waikato
The broader Waikato region experienced a 0.4% decrease in average home values. However, Hamilton's average home value rose by 0.6% to $788,171, now just 0.4% lower than the same time last year but still 14.1% below the late 2021 peak.
Taranaki
New Plymouth's average home value grew by 1% to $725,536, marking a 1.7% increase compared to the same time last year. In contrast, Stratford and South Taranaki districts saw declines of 2.6% and 5.3%, respectively.
Hawke’s Bay
Napier's average home value increased by 2.1%, while Hastings experienced a 3.4% reduction. Across the wider Hawke’s Bay region, home values decreased by 0.4% over the three months ending in February 2025.
Palmerston North
The city’s average home value increased by 0.9% to $637,895 over the three months ending in February 2025, now 0.7% lower than the same time last year.
Wairarapa
Home values in Wairarapa decreased by an average of 1.7% since the start of summer. South Wairarapa experienced a 1.9% quarterly reduction to $756,229.
