According to Cotality NZ’s latest Home Value Index, property values edged up by 0.2 per cent in October following a minor 0.1 per cent increase in September.
This comes after five consecutive monthly falls between April and August, with the national median now sitting at $811,662.
The modest gains varied across major centres, with Auckland continuing to decline by 0.2 per cent while Christchurch and Dunedin showed stronger growth at 0.4 per cent and 0.7 per cent respectively.
Tauranga and Wellington both recorded modest increases of 0.2 per cent, while Hamilton remained flat.
Cotality NZ Chief Property Economist, Kelvin Davidson, noted that these consecutive increases could mark the beginning of a market turnaround, though he emphasised caution.
“It’s a cliché, but upturns obviously have to start somewhere, and the recent emergence of small increases in property values would certainly be consistent with the falls in mortgage rates over the past year or so,” Mr Davidson said.
He highlighted that sentiment remains cautious and the economy and labour market continue to be subdued, with recent gains being relatively small in the broader context.
A significant development for the market is the upcoming easing of loan to value ratio rules from December 1, which was announced in mid-October.
“That may possibly benefit investors a bit more than owner-occupiers, although the potential scope for more pre-approvals for low equity loans could bolster first home buyers,” Mr Davidson said.
He said that banks typically implement such rule changes early, potentially showing effects in October’s mortgage lending statistics by late November.
Despite the recent uptick, property values across New Zealand remain significantly below their peak, down 17.3 per cent nationally.
The decline is most pronounced in Wellington, where values are 24.8 per cent below their peak, followed by Auckland at 22.9 per cent.
Within Auckland, the market showed mixed performance in October.
Franklin and North Shore saw slight increases, while Auckland City and Waitakere experienced more substantial declines. Compared to their previous peaks, values across Auckland’s sub-regions have fallen between 20 per cent and 25 per cent.
Wellington also presented a varied picture, with Wellington City increasing by 0.5 per cent while Lower Hutt fell by 0.4 per cent.
The region continues to show significant declines from peak values, ranging from 22.6 per cent in Porirua to 26 per cent in Lower Hutt.
Looking ahead, Mr Davidson anticipates modest growth rather than a dramatic boom, with several factors influencing the market’s trajectory.
“With mortgage rates already having fallen a long way, housing affordability more favourable, listings down a bit, and the economy set to improve, 2026 looks likely to see a rise in both property sales activity and house prices,” he said.
However, he suggested that potential buyers shouldn’t feel pressured to act immediately, as any price increases are likely to be moderate.
“With the stock of housing having risen in recent years relative to population, and debt to income ratio caps also now in action, only a modest rise in prices of perhaps 5 per cent or less seems more likely than a fresh boom,” Mr Davidson said.
