Flat values and a shifting rate outlook: what the May data means for advisers.
New Zealand's housing market entered mid-year in a holding pattern, with property values essentially unchanged in May and buyers firmly in control — even as the interest rate environment shifts in a direction that will add pressure for new borrowers and refinancers.
Despite an elevated stock of listings continuing to give buyers the balance of power in price negotiations, vendors are not being forced to capitulate. The national median value in May held at $808,187, unchanged from the previous month and down 0.1% over three months, according to Cotality NZ's June Monthly Housing Chart Pack and analysis published by NZFSG.
Values remain 0.6% lower than a year ago and still 17.0% below the early-2022 peak of $974,002. Total listings on the market currently stand at 28,197 — below the same time last year (31,042) but still at buyer-friendly levels. Sales volumes fell 8.3% in May compared with the same month in 2025, the fifth consecutive monthly decline, with year-to-date transactions down 4.7% or 1,775 deals.
A two-speed market: main centres soften, provinces hold
The flat national result masks meaningful divergence at the regional level. Auckland and Wellington both slipped further over the three months to May — down 0.5% and 0.6% respectively — continuing their underperformance as the market's softest patches, with Wellington now 25.4% below its peak, the largest decline of any main centre.
Christchurch was the standout performer, up 1.4% over the quarter and just 1.4% below its peak — the smallest main centre decline nationally. Dunedin rose 0.8% over three months while Hamilton edged up 0.2%.
The resilience in provincial markets reflects underlying economic support from the primary sector.
Kelvin Davidson (pictured), Cotality NZ chief property economist, notes the primary sector's strength — dairy farming in particular — should continue to support values in Southland, Canterbury, and Waikato.
That buyer-friendly backdrop is most visible in first-home buyer activity. According to the Cotality June chart pack, first-home buyers (FHBs) accounted for 28.5% of purchases across April and May combined — still roughly a record high — having grown their year-to-date market share from 25.8% to 27.7%, with the number of FHB purchases rising 2.4% even as overall sales volumes fell. FHBs are accessing KiwiSaver for at least part of the deposit and tapping low-deposit lending allowances at the banks.
By contrast, movers fell by around 11% year-to-date and mortgaged multiple property owners dropped by nearly 6%, with investor appetite dampened by flat rents, rising costs, and uncertainty about potential capital gains tax changes after the November election.
The rate environment is shifting — and not in borrowers' favour
The value picture is only half of the current market equation for advisers — the rate environment is shifting the other half. Although the RBNZ held the OCR unchanged in May, the Cotality chart pack notes the odds of a July OCR rise have probably lessened following the US-Iran peace deal, but acknowledges the Monetary Policy Committee's interpretation of the latest developments remains to be seen.
Around 57% of New Zealand's existing mortgages by value are currently fixed but due to reprice over the next 12 months, with another 31% within six months. Market rates have already moved ahead of any OCR decision, particularly for fixed terms beyond 12 months.
Borrowers repricing from a six-month rate to a two-year term are now facing an increase of 0.3%–0.4%, as NZFSG's analysis puts it directly: "the general direction of travel looks fairly clear (upwards), which will obviously be a hurdle for new borrowers as well as existing mortgage holders coming up for renewal."
The one offset is for borrowers rolling off one-year fixed rates from a year ago — they may still be able to refix at a similar or lower rate right now. That window, however, is narrowing. The rate backdrop had already been tightening ahead of today's data — standard residential mortgage rates rose across most fixed terms in May, with higher wholesale rates flowing through to higher fixed-term mortgage rates. Whether the easing in Iran-conflict energy price pressures changes that trajectory will depend on how the RBNZ and wholesale markets respond in coming weeks.
Two-sided risks remain, and a hotter-than-expected June quarter CPI could still revive the case for three OCR hikes in 2026.
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