National values down 1.5% this quarter, with Wellington and Auckland leading the fall
New Zealand's housing market has cooled further heading into spring, with the latest QV House Price Index showing average home values fell 1.5% nationally over the three months to the end of July, as the modest momentum seen earlier this year continued to fade.
Regional divide widens as fewer markets buck the trend
The average home is now worth $898,799, down 1.3% since the start of the year and 1.2% lower than the same time last year.
Among the main centres, Christchurch was the standout performer, edging up 0.3% and remaining the only major city with values higher than at the start of the year, while Auckland fell 2.2% and Wellington posted the sharpest decline of any main centre at 3.2%.
Tauranga continued to outperform much of the North Island with 0.7% growth, while Canterbury and Southland also held up better than the national trend.
QV national spokesperson Simon Petersen (pictured) said the softening had become more widespread since last month.
"The regional divide we highlighted last month is still evident, but there are fewer bright spots now. Winter has put a further chill through the market, while the prospect of higher borrowing costs and ongoing economic uncertainty have given buyers even less reason to rush," Petersen said.
That caution comes as all five major banks lifted fixed mortgage rates within the same fortnight, with wholesale funding costs — not competitive positioning — driving the moves, including Kiwibank's one-year special rate rising from 4.75% to 4.95% and its two-year rate from 5.19% to 5.39%.
Election uncertainty keeps buyers on the sidelines
Petersen said the slowdown reflected a market losing steam rather than undergoing a fresh correction.
"This isn't another sudden correction. It's an already subdued market losing what little momentum it had built earlier in the year," he said.
First-home buyers remain the most active segment, with well-presented, realistically priced homes still finding buyers, but Petersen said urgency has largely evaporated as the general election approaches. Fear of missing out among buyers has dropped to just 4% of respondents, the lowest reading since June 2024, reflecting how firmly market power currently sits with buyers.
"With the general election looming late this year, many prospective buyers appear content to sit on the sidelines and wait for greater certainty," Petersen said.
In Wellington, local QV registered valuer David Cornford pointed to a combination of pressures weighing on the capital specifically.
"This softening is due to the ongoing conflict in the Middle East, the high number of properties on the market, and the relatively weak economy in the capital. Interest rates are continuing to trend upwards, creating another headwind for the market," Cornford said.
What it means for advisers
The data reinforces a market moving at different speeds by region, with borrowing capacity and buyer sentiment likely to remain subdued until after the election.
Petersen said conditions were unlikely to shift quickly.
"Until that happens, we expect buyers to remain cautious and the market to continue moving at different speeds across the country," he said.
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