New Year, New Housing Market? Are The Winds Of Change Beginning To Blow?

The housing market looks set to remain relatively static throughout the opening months of 2025, following yet another flat quarter.

Our latest QV House Price Index shows residential property values edged upwards by an average of just 0.1% nationally in the December quarter, which was not enough to finish the year in the black. The average home is now worth $902,414, which is 0.3% less than at the start of 2024 and 15.2% below the market’s peak just over three years ago.

Now that flattening trend looks set to continue throughout the early part of 2025, with little evidence to suggest that property values are set to grow substantially this summer, according to QV operations manager James Wilson.

“It’s been ‘steady as she goes’ throughout much of last year, and it looks like it’s going to stay that way for a while yet. It’s a new year, but the same restraining factors are still very much at play – including sustained weakness in the labour market, a high cost of living, credit constraints, and a surplus of properties for sale on the market today,” he said.

“The marked uplift in demand for housing that has come as a direct a result of falling interest rates hasn’t yet converted into any significant price pressure, so we’re only seeing very small pockets of growth. However, we also haven’t seen quite so many reductions this quarter in particular, which indicates that we’re now at or very close to equilibrium in the market.”

Indeed, just three of the main urban areas we monitor experienced relatively modest reductions in average home value last quarter – Rotorua (-2.3%), Marlborough (-0.7%) and Queenstown (-1.4%). Average home values increased modestly everywhere else, including in Auckland (1.3%), Wellington (0.4%), and Christchurch (1.1%).

That means seven of New Zealand Aotearoa’s main urban centres will now start 2025 with their average home values sitting marginally higher than at the start of the year prior. They are Hamilton (0.6%), New Plymouth (2%), Nelson (0.6%), Christchurch (1.8%), Queenstown (2.5%), Dunedin (2.9%), and Invercargill (3.9%).

“In the longer term, I expect we will see more growth this year than last, but with rising unemployment and such a high level of economic uncertainty, there are currently no indications that house prices are suddenly going to go from flat to flat-out in the immediate future,” said Mr Wilson.

“We can expect to see more investors return to the market throughout 2025, especially if interest rates drop markedly further. That will put a bit of price pressure on first-home buyers, who have picked up a larger share of the market in recent times. But it looks as though the economy is still in a dark place right now, and debt to income ratios should still keep a lid on things in the year ahead.”

Northland

Northland ended 2024 with its average home value down 2% for the year.

This is despite a small amount of growth in the December quarter, with values rising by an average of 1.9% throughout the region. The average home value is now $723,235.

Of the three local council areas that make up the wider Northland region, home values were flattest in the Far North, where the average value reduced by just 0.3% to $694,386 last year. This is compared to average annual reductions of 2.7% in Whangarei and 3.1% in Kaipara.

Auckland

Residential property values in Auckland finished last year 3.1% lower on average, despite a small amount of growth in the final quarter of 2024.

All seven of the Super City’s former local council areas recorded modest growth throughout the three months to the end of December. Home values on the North Shore (3%) increased the most on average this quarter, while home values in Auckland City (0.9%) and Papakura (0.4%) increased the least.

Only home values in Franklin finished 2024 slightly higher than at the start of the year, with its average home value climbing just 0.6% annually to $890,869. Manukau (-5.8%) recorded the largest average annual home value reduction last year.

Tauranga

Tauranga experienced small home value reductions in seven out of the past 12 months, but finished 2024 with consecutive months of modest growth.

As a result, the city recorded a small amount of home value growth this quarter, but it wasn’t enough to finish the year in the black. The city’s average home is now worth precisely $1,018,936; up 1.4% for the quarter, but down 1.6% annually.

Hamilton

Hamilton’s average home value finished 2024 in the black, following a positive December quarter.

The city’s average home increased in value by 2.3% throughout the last three months to finish the year at $789,995. That figure is now 0.6% higher than at the start of the 2024 calendar year.

Taranaki

Home values increased across the wider Taranaki region in the December quarter.

New Plymouth’s average home increased in value by 1% to $721,366. That figure is 2% higher than at the start of 2024.The average home value also increased by 3.7% to $491,728 in Stratford, and by 2.8% to $442,670 in South Taranaki.

Hawke’s Bay

Home values in Napier and Hastings finished 2024 lower than when it started.

These neighbouring cities saw their values reduce by 0.5% and 1.3% respectively last year, despite a small amount of growth in the final quarter.

Napier’s average home value is now $749,927, which is up 2.9% for the quarter. In Hastings, the average home value is $782,413, up 1% for the quarter.

Palmerston North

Property values in Palmerston North are just 1% lower on average than at the same time last year.

The city’s average value is now $636,076, following a small 1.1% increase over the final quarter of 2024.

Local QV registered valuer Olivia Betts said the property market had been relatively stable since June 2023 – a trend that she expected would continue into 2025.

“The housing market is expected to remain relatively steady overall in 2025. Interest rates have decreased, which has helped to improve affordability – although there may still be a significant number of fixed-rate mortgages coming to an end, which could affect market dynamics,” she said.

Wairarapa

Property values grew by an average of 2.9% across the Wairarapa last year.

South Wairarapa saw the most growth on average; its average home value increased by 3.6% to $780,327. Masterton wasn’t far behind, growing 3.3% annually to $580,866. Home values in Carterton, meanwhile, increased by 0.7% annually to reach a new average of $633,399.

Wellington

The average home in Wellington is now worth 2% less than at the start of last year.

The average value is now $841,489, following a modest 0.4% increase over the final quarter of 2024 – the region’s first quarterly growth since April.

However, home values continued to weaken in Porirua (-0.5%), Upper Hutt (-0.3%) and Wellington City (-0.3%) throughout the three months to the end of December.

“The property market in Wellington softened over much of 2024 on the back of tough economic and employment conditions and high stock levels. However, the final month of the year recorded some very slight positive value growth,” said local QV senior consultant David Cornford.

“Value declines now appear to be behind us and a more stable market seems to be emerging. Market activity gained some traction in the final months of the year and there are early signs of investors now starting to re-enter the market after a long absence.”

“Interest rates have declined, improving affordability. However, we expect high supply to offset any meaningful value growth in the first few months of the year. As such, it’s likely that it will continue to be a buyers’ market in the short term, until stock levels decrease in the region,” he concluded.

Nelson

Nelson’s residential property values have risen slightly for the third month in a row.

The city’s average home increased in value by 0.7% to $781,940 last quarter, including by 0.2% in the month of December itself. It means the average home did little better than break even in 2024, with annual growth sitting at 0.6%.

“Last year saw house prices remain generally stable across the region. There was an increase in properties available on the market, with sales volumes still being relatively subdued overall,” said QV Nelson/Marlborough manager Craig Russell.

“Now as 2025 gets underway, recessionary pressures are continuing to impact housing affordability, and serviceability remains difficult, despite the gradual easing of interest rates in the latter part of last year. Given the high levels of inventory, we expect the housing market to continue to be subdued for the first part of 2025, with potential for modest gains in the latter part of the year.”

“Insurance was a big focus in 2024, and is likely to be so again in 2025, with the ability to obtain finance and insurance now and into the future being key drivers in value,” Mr Russell concluded.

West Coast

Home values on the West Coast finished last year 11.3% higher on average.

Breaking it down by district, Grey experienced the most growth in 2024 – its average home value increased by 16.7% to $453,545. Buller’s average home value increased by 9.3% annually to $377,808, and Westland’s average increase and home value was 5.3% and $465,087 respectively.

Home value growth continues to fluctuate from month to month due to low sales volumes. However, the latest QV House Price Index shows values increased across the region last quarter by 5.9%, compared to a national average increase of just 0.1%.

Canterbury

The Canterbury region ended 2024 on a positive note, with the residential property market averaging 1.8% value growth over the calendar year.

At the district level, Ashburton experienced the largest amount of home value growth in the Canterbury region last year, increasing by 6.5% to $575,108. Waimakariri recorded the least growth; its average home value neither increased nor decreased at $712,876.

There was modest growth everywhere except Mackenzie (-0.8%) and Waimate (-0.5%) in the December quarter, with Christchurch’s average home value increasing by 1.1% to $766,388. Selwyn (0.2%), Waimakariri (0.4%) and Hurunui (0.6%) also experienced modest growth.

QV senior consultant Olivia Brownie said the local housing market was now in equilibrium, showing stability and resilience once more. “After seeing a peak of high interest rates and an overall slowdown in the property market, we ended the year with our steady economy and employment environment in Canterbury providing stability for the market.”

“With the appeal of yet more new amenities on the horizon in Christchurch and increasing new migrants to the region, we expect 2025 to see more value growth in the residential property market,” she added.

Otago

The average home value has strengthened ever so slightly across the greater Otago region.

Our latest QV House Price Index shows values have increased this quarter in Central Otago and Dunedin by 2.9% and 1.1% in respectively, and decreased in Waitaki and Clutha by 1.5% and 0.8% respectively.

However, home values in all districts will start the year higher on average than they were one year ago. Clutha (5.5%) recorded the most growth annually in 2024, followed by Waitaki (4.4%), and Central Otago (3.3%).

In Dunedin, the average home value increased by 2.9% last year to $645,378. Of the main urban areas we monitor, only Invercargill (3.9%) recorded more growth in 2024.

“The property market in Dunedin has been relatively stable compared to other New Zealand cities,” said local QV registered valuer Rebecca Johnston. “Its average home value increased by 2.9% annually, in contrast with declines in markets like Auckland and Wellington.”

"Looking to the year ahead, we expect similar positive house price growth within the 3-4% range due to an improving economic climate, lower interest rates, and continuing infrastructure projects.”

Queenstown

Queenstown’s housing market ended 2024 with a small dip.

Our latest figures show the average home value decreased by 1.4% to $1,821,424 in the December quarter. However, that figure still ended the year 2.5% higher than it started.

Invercargill

Invercargill experienced more home value growth on average last year than any of New Zealand Aotearoa’s other large urban areas.

The city’s average home value increased by 3.9% annually to reach $495,947, including by 1.9% in the final quarter of the year.

That is slightly more growth than in 2023, when the average home value increased by 2.3% annually, and significantly more than in 2022, when values reduced by an average of 4.1% annually.

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