According to the latest Cotality hedonic Home Value Index, national property values decreased by 0.1 per cent in May, with the national median now at $818,132.
Values remain 16.3 per cent below the January 2022 peak and 1.6 per cent lower than a year ago.
Regional markets showed greater resilience than main urban centres, with Queenstown rising by 1.2 per cent, Invercargill up 0.5 per cent, and several other provincial areas recording modest gains.
Meanwhile, major cities experienced varying fortunes, with Hamilton inching up 0.1 per cent while Auckland dipped 0.3 per cent, Wellington fell 0.4 per cent, and Christchurch dropped 0.8 per cent.
Cotality NZ Chief Property Economist Kelvin Davidson said the figures serve as a reminder that any housing market recovery will likely remain gradual and inconsistent.
“Lower mortgage rates are clearly going to be bolstering households’ confidence as well as their wallets, and there were signs of higher loan-to-value and debt-to-income ratio lending activity in the latest Reserve Bank figures,” Mr Davidson said.
The Auckland market highlighted the broader national trends, with significant variations across its sub-regions.
Rodney recorded a 0.4 per cent rise and Franklin increased by 0.2 per cent, while North Shore experienced a 1.0 per cent decline.
Wellington’s property market similarly showed mixed performance, with Lower Hutt achieving a small increase while Wellington City itself recorded a 0.7 per cent drop in May.
Despite some positive indicators, multiple factors continue to constrain the market’s recovery potential.
Housing affordability remains challenging in absolute terms, while economic conditions and the labour market show ongoing weakness.
“It’s not one-way traffic,” Mr Davidson said.
“After all, housing isn’t necessarily affordable in absolute terms, while the economy and labour market remain subdued too. Indeed, filled jobs edged lower again in April.”
Looking ahead, 2025 is expected to be characterised by these competing market forces, with lower interest rates supporting activity but other constraints limiting price growth.
The current market conditions may actually represent a healthier balance than previous boom cycles, providing opportunities for various buyer groups without the risk of runaway price increases.
“A subdued or ‘balanced’ market is probably what we’ve been needing for a while now – opportunities for different buyer groups, first home buyers and investors included, with reduced risk of prices running away from them again,” Mr Davidson said.
