Elevated stock levels and rising mortgage rates keep sellers and buyers at a standstill
New Zealand's residential property market recorded its fifth consecutive monthly decline in August, according to the latest Cotality Home Value Index. The national median dwelling value fell to $797,944, down 0.36% for the month, 1.29% over the past three months, and 0.97% over the past year.
Cotality chief property economist Kelvin Davidson (pictured) said "the result is a market where sales activity has gradually slowed through 2026, and property values have continued to drift lower."
Davidson was careful to distinguish this from the sharper downturn seen earlier in the cycle: "most of the heavy price correction occurred in 2022 and 2023, but conditions have remained subdued since then."
Provincial centres lead the falls, while some regions still post gains
The steepest annual declines were concentrated in smaller provincial markets rather than the main centres, led by Horowhenua (-6.37%), Otorohanga (-6.15%), Carterton (-5.59%), Tararua (-4.83%), and Hastings (-4.35%).
Results across the main urban districts were more mixed.
Auckland (-2.58%) and Wellington (-2.48%) recorded annual losses, alongside a smaller decline in Waikato (-0.45%). By contrast, Bay of Plenty (+1.59%), Canterbury (+3.24%), and Otago (+2.32%) all posted annual gains, underlining how uneven conditions remain across different parts of the country.
Buyers and sellers both in no hurry to move
Davidson said the standoff reflects hesitancy rather than distress on either side.
"Economic uncertainty, rising mortgage rates, and a high level of properties available for sale are giving buyers little reason to rush," he said.
Vendors, meanwhile, are similarly unpressured: "sellers generally aren't under significant pressure. Labour market conditions have softened, but widespread job losses haven't emerged, allowing many vendors to remain patient and hold relatively firm on pricing."
That rate pressure has since increased further. The OCR rose 25 basis points to 2.75% on 2 September after annual inflation hit 4.1% on an oil-price shock tied to the Middle East conflict — one more reason for buyers to hold back, even as one group keeps bucking the trend.
First-home buyers remained the standout performer in the same NZHL Property Report, with a net 35% of agents seeing more of this group active — the strongest reading since before the conflict began — even as a net 49% reported fewer investors looking to buy.
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