New Zealand property market trends to watch in 2022

For the New Zealand real estate market, 2021 has been the year the government stepped in and regulatory pressures increased in an effort to curtail rapidly rising property prices.

Across the country the 12-month change in median values recorded jumps of between 6.7 per cent in Sunshine Bay, and a whopping 47.7 per cent in Woodville.

The figures, released in CoreLogic’s 2021 Best of the Best Report, show that the highest selling property was 73 Argyle St, Auckland, which fetched $22 million.

In March, the government extended the Bright-line Test for existing properties and announced the phased removal of interest deductibility, unless investors were buying new builds, from October 1.

At the time, Finance Minister Grant Robertson said:

“Tax is neither the cause nor the solution to the housing problem, but it does have an influence, and this is part of the government’s overall response.”

The Reserve Bank of New Zealand was also granted powers to use other lending restrictions such as caps on debt-to-income ratios, which are now being consulted and are already in force at some banks.

“The RBNZ themselves reinstated loan-to-value ratio rules on 1 March 2021, before ramping up investors’ required deposits to 40 per cent on 1 May 2021,” the report said. 

“Then from 1 November 2021, owner-occupiers too have faced tighter limits, with the low deposit lending threshold cut from 20 per cent to 10 per cent

“In other words, nobody has escaped the tightening credit environment, not least first home buyers, who are also facing additional pressures now in the form of limited (or no) pre-approvals.”

Source: CoreLogic

The key data

Herne Bay, in Auckland, recorded the highest median value for 2021, sitting at $3.5 million, while the lowest median price was $193,700 at Runanga in Grey.

Source: CoreLogic
Source: CoreLogic

Similarly Runanga had the highest gross rental yield of 9.6 per cent, while Herne Bay had the lowest at only 1 per cent.

Karaka Bays in Wellington recorded the highest median weekly rent of $875 per week, while the lowest median rent was just $285 per week in Twizel in MacKenzie.

But if it was the highest growth in rent rates you were after then Ashhurst and Fitzherbert, in Palmerston North, were the top suburbs, with rents increasing 40.6 per cent.

However, if you owned an investment property in the Dunedin suburbs of Dalmore, Liberton, North East Valley or Pine Hill, you would have seen rental rates drop 9.7 per cent.

It was quickest to sell a property in Port Waikato, at just four days, while it took 74 days at Athenree, in the Western Bay of Plenty.

The report showed that sale activity got off to a strong start in New Zealand in 2021, but from about June the market showed signs of fatigue.

“Some softening was caused by the simple lack of listings,” the report said.

“Property value growth has also generally cooled since the middle of the year according to monthly/quarterly measures, though the annual rate is still high, reflecting a lower base a year ago due to COVID’s first disruption of the market.”

Trends to watch in 2022

CoreLogic Chief Property Economist Kelvin Davidson said he expected to see a significant housing market slowdown in 2022.

“Sales volumes have already turned a corner and are likely to be much quieter in 2022, with the pace of annual value growth surely set to continue to ease from a figure of more than 25 per cent for calendar 2021 to perhaps single digits, even low single digits, in 2022,” he said.

  1. Further lending regulations

Mr Davidson said it was likely the RBNZ would impose a floor on serviceability interest rates from mid next year, before removing those in favour of formal caps on debt-to-income (DTIs) ratios at the end of 2022.

“ It’s up for grabs about where those caps are set – for example, they previously indicated it could be six for investors and seven for owner-occupiers, but the latest consultation documents hinted that a flat rate, perhaps seven, for all might be more likely,” he said.

“It’s also conceivable that any introduction of formal DTIs could also see the LVR rules relaxed a bit. But whatever the final details, it seems certain that DTIs would hit investors the most.”

  1. Listing supply

Previously tight listing supplies have started to turn the corner, with higher stock levels being seen across the country, especially in areas such as Hawke’s bay, Wellington, Otago and Southland.

“That’s not so much due to new listings taking off, but more to a slowdown in sales,” Mr Davidson said.

  1. A buyer’s market

Some investors may look to cyrstallise their previous capital gains and list property and more choice for buyers equals reduced pressure on prices. 

“It might take a while for vendors to respond to changed conditions and some might pull their listing rather than accept a lower price than they were hoping for,” Mr Davidson said.

“However, that dynamic can only prevail for a finite period, and eventually 2022 looks set to tip towards a buyer’s market.”

  1. Construction sector slows

Mr Davidson said there was a very real prospect the hot construction industry would ease off next year as climbing costs could deter demand for new homes.

“In turn, reduced volumes of new property output will tend to support existing values,” he said.

“If anything, our concerns tend to centre on parts of the lower North Island, such as Tararua, Horowhenua, Whanganui, Porirua, and Lower Hutt, as well as other areas such as Wairoa, Otorohanga, Kawerau, Westland and MacKenzie.

“At the same time, areas such as Ashburton, Timaru, Waimakariri, Selwyn and Tasman look a bit safer, although nowhere is ever immune to all market forces. 

“No doubt there’ll be plenty more twists and turns for the housing market in 2022, and that’s before you consider any further COVID disruptions. 

“But we’re certainly expecting a significant slowdown, and for 2022 to be a year where we see buyer’s choice increase even with intensified financing restrictions.”


Top sale 72 Argyle St, $22 million

Highest median value Herne Bay, $3,504,850

Lowest median value Auckland Central, $613,000

Shortest days on market Helensville, 10 days

Longest days on market Piha, 57 days

Highest gross rental yield Orere Point, 5.1 per cent

Lowest gross rental yield Herne Bay, 1 per cent


Top sale 350 Exelby Rd $9.6 million

Highest median value Flagstaff, $1,110,800

Lowest median value Whitiora, $606,150

Shortest days on market Grandview Heights, 7 days

Longest days on market Hamilton Central, 28 days

Highest gross rental yield Enderley, 4.1 per cent

Lowest gross rental yield Hamilton Lake, 2.5 per cent


Top sale 307A Oceanbeach Rd, $7.5 million

Highest median value Mount Maunganui, $1,407,200

Lowest median value Parkvale, $681,750

Shortest days on market Papamoa, 16 days

Longest days on market Tauranga South, 26 days

Highest gross rental yield Parkvale, 4.2 per cent

Lowest gross rental yield Mount Maunganui, 2.3 per cent


Top sale 36 Central Tce, $6.5 million

Highest median value Seatoun, $2,046,050

Lowest median value Wellington Central, $546,300

Shortest days on market Timberlea, 7 days

Longest days on market Pukerua Bay, 24 days

Highest gross rental yield Ascot Park, 5 per cent

Lowest gross rental yield Kelburn, 1.5 per cent


Top sale 21 Wairarapa Tce, $8 million

Highest median value Fendalton, $1,541,450

Lowest median value Phillipstown, $401,500

Shortest days on market Belfast, 12 days

Longest days on market Akaroa, 29 days

Highest gross rental yield Kainga, 6.3 per cent

Lowest gross rental yield Fendalton, 1.8 per cent 


Top sale 135 Tirohanga Rd, $2.85 million

Highest median value Maori Hill, $1,027,300

Lowest median value South Dunedin, $445,100

Shortest days on market Outram, 9 days

Longest days on market Waverley, 18 days

Highest gross rental yield Ocean Grove, 4.7 per cent

Lowest gross rental yield Maori Hill, 1.6 per cent

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Kylie Dulhunty

Kylie Dulhunty is the Deputy Editor at Elite Agent.