New Zealand’s residential property market experienced a slight downturn in July, with property values falling by -0.2%, according to Cotality NZ’s latest Hedonic Home Value Index (HVI). The national median value now stands at $819,921, reflecting a similar -0.2% drop year-on-year.
“The market remains subdued, with lower mortgage rates providing some uplift, but this is being offset by high stock levels and a cautious labour market,” LJ Hooker Head of Research and Business Intelligence Mathew Tiller said.
This decline follows a year of conflicting forces, where positive factors like declining interest rates are tempered by economic uncertainties.
“As expected, 2025 is shaping up to be a year of competing forces, lower interest rates are supporting demand, but economic uncertainty and job market caution are holding back confidence.” Tiller said.
Despite the dip, the market shows signs of stabilisation, setting the stage for potential shifts as spring approaches.
Main centres show mixed performance
Regional markets displayed varied results in July, with some centres holding steady while others weakened. Auckland and Dunedin saw the largest declines, both dropping by -0.6%, with Auckland down -1.4% over the past quarter. Wellington dipped by -0.2%, while Christchurch saw a minor -0.1% decline, though its values remain +0.4% higher than three months ago. Hamilton and Tauranga, however, posted gains of +0.4% and +0.9%, respectively.
“The jobs market uncertainty is a key factor holding back stronger growth, but rising sales activity is starting to reduce available stock,” Tiller said.
Despite these variations, no clear upward trend has emerged across the main centres.
“Hamilton and Tauranga’s gains are encouraging, but they follow softer months, so it’s too early to call this a sustained recovery.”
Auckland experiences ongoing market softness
Auckland’s property market remained challenging in July, with only Rodney avoiding a decline, rising by +0.1%. Sub-regions like Manukau, Auckland City, and North Shore saw falls ranging from -0.6% to -1.0%, while Franklin, Papakura, and Waitakere also experienced modest declines.
“Auckland’s high stock levels are beginning to ease, but it’s still very much a buyer’s market. First-home buyers and mortgaged investors are capitalising on these conditions,” Tiller said.
The market’s softness is evident in the lack of significant growth over the past year, with only North Shore recording a minor annual increase.
“Buyers have plenty of choice, which is keeping price growth in check, but the gradual reduction in listings could shift dynamics in the coming months.”
Wellington market shows signs of stabilisation
In Wellington, property value trends were mixed in July. Lower Hutt rose by +0.3%, and Porirua saw a slight increase, but Wellington City itself experienced declines. Over the past year, Porirua is the only sub-market to record growth (+0.8%), though it remains -21.6% below its peak.
“Wellington’s sharp downturn appears to have bottomed out, but confidence levels remain low, leading to inconsistent value trends,” Tiller said.
The high volume of listings continues to influence Wellington’s market, giving buyers leverage.
“Sellers need to be realistic with pricing to attract interest, but the market is showing signs of stabilising, which could pave the way for a more active spring.”
Regional areas display market resilience
Provincial markets showed greater resilience than urban centres in July, possibly reflecting the strength of New Zealand’s primary industries. While Gisborne saw a -1.3% drop, other regions like Hastings, Whangārei and New Plymouth recorded gains of at least +0.5%.
“Regional areas are benefiting from a two-speed economy, with export-driven sectors performing better than urban-based industries,” Tiller said.
However, Tiller cautioned against overemphasising this trend.
“It’s early days, and housing conditions remain subdued across most regions. That said, a potential export-led recovery could boost regional house prices relative to urban areas over the next year or two.”
Property listings continue to decline
National stock levels fell for the third consecutive month, dropping by nearly 2,000 to 30,430 properties, a -0.4% decrease year-on-year, according to realestate.co.nz. New listings also declined by -4.2% to 7,737, though Northland (+26.3%), Gisborne (+54.5%), and Taranaki (+34.3%) saw increases.
“Vendors who price realistically are finding success, and with less competition, now can be a strategic time to list,” Tiller said.
The tightening stock is starting to shift market dynamics, particularly as buyer demand remains steady.
“Fewer homes are coming onto the market, but buyers are still active, creating opportunities for well-priced properties.”
Asking prices remain stable
The national average asking price edged up by +0.6% year-on-year to $858,189, reflecting continued price stability. The West Coast saw a significant +25.3% increase to $500,000, while Nelson & Bays (+2.6% to $874,818) and Northland (+9.8% to $843,362) also recorded strong growth. In contrast, regions like Central Otago/Lakes District (-8.5% to $1,437,577) and Marlborough (-13.6% to $725,377) saw declines.
“While national prices are holding steady, regional variations highlight the importance of local market conditions,” Tiller said.
These differences underscore the diverse factors at play across New Zealand.
“Strong growth in regions like the West Coast shows that affordability and lifestyle appeal can drive demand, even in a subdued market.”
First-home buyers capitalise on opportunities
In July, 58.5% of properties listed on realestate.co.nz were priced below $850,000, creating a window for first-home buyers.
“With stock tightening and prices stable, now is an ideal time for first-home buyers to secure a property before the spring surge,” Tiller said.
This price range offers opportunities for buyers with clear goals and solid finances.
The market’s current conditions favour first-home buyers and small-scale investors.
“Buyers who are ready to act can take advantage of the high proportion of listings below the national average, but they’ll need to move quickly as competition is likely to increase.”
Mortgage refinancing reaches record levels
June saw a record 3,500 mortgage holders switch lenders, involving nearly $2.5 billion in lending, driven by low break fees and attractive cashback offers.
“With 14% of mortgages on floating rates and 39% of fixed loans due to roll off by year-end, borrowers are actively seeking better terms,” Tiller said.
First-home buyers continue to dominate low-deposit lending, accounting for 75-80% of high loan-to-value ratio activity. This refinancing surge reflects borrower agility in a shifting market.
“The high level of switching shows that mortgage holders are closely monitoring rates and terms, which could influence market activity as more borrowers free up cash through lower repayments,” Tiller said.
Market outlook remains cautious for 2025
Looking ahead, the property market is expected to remain cautious through 2025.
“Sales volumes are normalising and tightening stock could lead to price competition later in the year, though broader economic challenges will likely keep price growth subdued, at least in the short term” Tiller said.
The Official Cash Rate decision on 20 August, potentially dropping to 3%, will be a key factor, though mortgage rates may already be near their floor.
Buyers and sellers are adopting a measured approach, with first-home buyers and investors remaining active.
“Vendors who price realistically will continue to see results, and buyers should act now to capitalise on current opportunities before the spring market heats up,” Tiller concluded.
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