No Sizzle This Summer For Residential Property Market

It’s been a flat summer for New Zealand’s housing market, in spite of falling interest rates.

Our latest QV House Price Index shows residential property values have increased nationally by an average of just 0.5% in the three months to the end of February 2025. The average home is now worth $912,904, which is 1.4% less than the same time last year and 14.1% below the market’s peak in late 2021.

QV operations manager James Wilson said it had been the housing market’s flattest summer in six years – since home values increased by just 0.4% throughout the pre-Covid summer months of December, January, and February in 2019.

“After some pretty significant volatility throughout the past half-decade, the housing market now appears to have well and truly stabilised,” he said. “We’re no longer seeing so many significant shifts up or down, with home values staying ‘steady as she goes’ over the summer, despite falling interest rates and a spreading expectation that we’re now through the worst of it.”

Across New Zealand’s main urban areas, Auckland (0.6%) and Wellington (0.3%) sat on either side of the national average this quarter and Christchurch (0.9%) did little better. Rotorua (2.1%), Napier (2.1%) and Invercargill (2.1%) experienced the most growth on average, while Hastings (-3.4%), Marlborough (-0.5%) and Whangarei (-0.5%) experienced the largest home value reductions.

“Although interest rates have come down notably in recent months, the resulting increase in demand is being partially offset by a slowdown in population growth and a large surplus of properties for sale. Affordability issues are still evident in the main urban areas in particular, with unemployment still being of major concern for many Kiwis,” Mr Wilson said.

“As for investors, anecdotal evidence from across the country suggests that growing numbers are looking to re-enter the market in 2025, but it’s still going to take a while before interest rate relief fully phases through and debt-to-income ratio limits will undoubtedly be a barrier for many of them.”

In the meantime, Mr Wilson said first-home buyers were still largely in the ascendancy, provided they had job security and their finances in order. “Although economic conditions have been remarkably tough on everyone, first-home buyers have benefited in recent times from there being far less competition with investors,” he said.

“When things do eventually get more competitive, and all the excess stock on the market today is eventually absorbed, then we’ll see prices start to grow once more. That’s not looking imminent. In fact, at this early stage it appears as though we could well be in for a relatively flat autumn too,” he concluded.

Northland

Home values remain relatively static across the Northland region.

Our latest QV House Price Index shows Kaipara District’s average home value increased by 1.4% to $833,882. The average home value in the Far North reduced by nearly as much, dropping 1.3% to $693,763.

In Whangarei, the average home value reduced by 0.5% to $715,537, which is a slightly larger reduction than the 0.3% decline reported in the January quarter.

Auckland

It’s been a flat summer for Auckland’s housing market.

The city’s average home value has increased by 0.6% to $1,245,626 in the three months to the end of February 2025, including no growth whatsoever last month.

All bar one of the Super City’s seven former local council areas recorded a small rise in average home value this quarter, with Papakura (-1.7%) recording the only reduction. Auckland (1%) saw the biggest rise, with the North Shore (0.9%) and Franklin (0.9%) close behind.

The average home value in Auckland is 3.1% lower than the same time last year and 19.2% below the market’s peak in late 2021.

Bay of Plenty

Home values have continued to slowly bubble upward in Tauranga.

The city’s average home value increased by 1.6% to $1,020,948 in the February quarter – up slightly on the 1.4% growth recorded in the three months to the end of January. The average home value is now 1.9% lower than the same time last year.

Meanwhile, home values have also risen by an average of 1.4% across the wider Bay of Plenty region this quarter. Rotorua (2.1%) recorded above average growth; Gisborne (0.8%) and Western Bay of Plenty (0.6%) were a little below.

Waikato

Home values reduced across the broader Waikato region by an average of 0.4% in the February quarter.

Hamilton, however, performed slightly above average – its average home value increased by 0.6% to $788,171. That figure is now just 0.4% lower than the same time last year but remains 14.1% below the peak of the market in late 2021.

Local QV registered valuer Marshall Wu said the housing market was exhibiting early indications of some improvement, driven by expectations of further monetary easing following the first rate cut in February 2025.

“Lower mortgage rates are generally expected to stimulate housing demand and enhance affordability. When combined with easing cost of living pressures, improved consumer sentiment and rising income, these factors should contribute some stability to the housing market,” he said.

“A decline in new build approvals is also expected to help support local housing prices, further bolstered by high labour and material costs.”

However, he noted that the increase in demand driven by lower interest rates could be partially offset by a slowdown in population growth. “Declining migration figures are likely to reduce rental demand, potentially leading to a decrease in housing purchases.”

In the meantime, purchasers continue to benefit from a wider selection of available properties. “Given the prevailing economic softness and rising unemployment rate, the likelihood of a significant housing market growth cycle in 2025 remains low,” Mr Wu added.

Taranaki

New Plymouth has outperformed its neighbouring districts this quarter.

The city’s average home value grew by 1% to $725,536. That figure is now 1.7% higher than the same time last year.

In contrast, average home values reduced in the districts of Stratford and South Taranaki by 2.6% and 5.3% this quarter respectively.

Hawke’s Bay

Napier and Hastings had contrasting quarters – home values increased by an average of 2.1% in the former and reduced by 3.4% in the latter.

Across the wider Hawke’s Bay region, home values decreased by just 0.4% throughout the three months to the end of February 2025. It means the average home in the region is now worth 1.4% less than the same time last year.

Palmerston North

Home values have remained relatively flat this summer in Palmerston North.

Our latest QV House Price Index shows that the city’s average home value increased by 0.9% to $637,895 throughout the three months to the end of February 2025. The average home is now worth 0.7% less than at the same time last year.

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

“Interest rates have continued to decrease, which is helping to improve affordability – although there may still be a significant number of fixed-rate mortgages coming to an end, which could affect market dynamics. Despite these factors, the housing market is expected to remain relatively steady overall in 2025,” she said.

Wairarapa

Home values in Wairarapa have shrunk by 1.7% on average since the start of summer.

The district of South Wairarapa experienced the largest decline throughout this period – a 1.9% quarterly reduction to $756,229. Masterton’s average home value also reduced by 1.6% to $564,659, and home values in Carterton fell by 0.8% to a new average of $621,334.

Wellington

Residential property values have remained relatively motionless throughout much of the Wellington region this summer.

Our QV House Price Index for February 2025 shows that Wellington’s average home value has increased by just 0.3% to $840,884 this quarter.

That’s an even smaller increase than the 0.5% growth recorded throughout the three months to the end of January, and the 0.4% growth recorded throughout the three months to the end of December last year.

“Values continue to be relatively flat in the Wellington region, owing to the high stock levels and the continued cautious approach being taken by buyers,” said local QV senior consultant David Cornford. “Public sector workforce contraction also continues to impact the Wellington property market.”

“Provided you do have job security, now could be considered a favourable time to enter the market – particularly for first home buyers, given property values have likely reached or have nearly reached their trough in the cycle, interest rates have come back and there is ample choice in the market.”

Nelson

Home value growth remains slow but steady in Nelson.

The city’s average home value has risen by 1.6% to $793,505 in the February quarter, yet remains only 1.8% higher than at the same time last year.

“According to agents, most activity is in the $550,000 to $800,000 price bracket – very much like we saw at the end of 2024. That price bracket includes first-home buyers and a limited number of investors,” said local QV valuer Geoff Butterworth.

West Coast

Low sales volumes are still causing the West Coast’s housing statistics to fluctuate from month to month and quarter to quarter.

Our QV House Price Index for February 2025 shows that average home values have increased the most in Grey District over the last six months – rising 5.5% to $447,242 – with Buller and Westland now showing much more muted growth of 1.3% and 1.1% respectively.

Canterbury

Property values have remained largely immobile this summer in Christchurch despite recent interest rate reductions.

The Garden City’s average home value has grown throughout the three months to the end of February by 0.9% to $769,984. That figure is 1.3% higher than the same time last year.

It was a similar story in Waimakariri, where the average home has increased in value by 1.4% to reach $719,308 this quarter. Hurunui, in contrast, recorded a small 1.2% quarterly home value reduction to $641,420. Selwyn’s average home value also grew by just 0.3% to $843,378.

Local QV senior consultant Olivia Brownie commented: “After an active start to summer in the residential property market with some consistent growth in house values, there has now been a slight slowing in value growth. Perhaps this is due to the post-holiday increase in property listings and purchasers awaiting more interest rates cuts.”

“With the number of listings and tight national economic conditions, we expect minimal value growth over the coming months. Yet due to decreasing interest rates and increasing lending capabilities we also do not see any decline on the horizon. A decline in rents and an increase in rental properties available may also have a future influence on house prices in certain property types.”

Meanwhile, across the wider Canterbury region this quarter, the average home value dipped by 0.7% to $530,663 in Timaru, and increased by 1.5% to $568,744 in Ashburton.

Otago

Property values have been kept at a virtual standstill this summer in Otago.

Our latest QV House Price Index shows the Otago region’s average home value has remained unchanged this quarter, with Waitaki (0.3%) and Dunedin (0.3%) experiencing just miniscule growth on average since the start of December last year.

Local QV registered valuer Rebecca Johnston said it continued to be a buyers’ market in Dunedin. “Interest rates have continued to drop following the latest OCR announcement, while new listings continue to climb, giving potential purchasers plenty of choice.”

“Developers are now shifting to more sought-after locations, including Maori Hill and St Clair, and periphery suburbs to produce a higher-value end product, enhanced by the higher density zoning from the city’s 2nd Generation District Plan and the lower level townhouse supply now being somewhat saturated. This trend is expected to continue, with demand for quality warm housing and one fifth of Dunedin’s housing stock older than 1920,” she said.

Meanwhile, Central Otago has been the most buoyant of Otago’s districts this summer; its average home value grew by 2.1% in the three months to the end of February 2025.

Queenstown

Residential property values are down again slightly in Queenstown.

Our QV House Price Index for February shows the average property value has reduced locally by 0.4% this quarter to $1,820,880. That is a smaller reduction than the 1.5% average decline recorded in the January quarter.

Values in Queenstown are now just 0.3% lower on average than at the same time last year.

Invercargill

Residential property values have grown again in Invercargill this quarter.

Our latest QV House Price Index shows that the city’s average home value has increased this quarter by 2.1% to $500,344.

However, QV registered valuer Andrew Ronald noted that the city’s average home value remained static in the month of February itself. “The latest QV House Price Index for Invercargill shows home values increased by just 0.01% compared to the previous month,” he said.

“There is still steady demand from first-home buyers and investors are beginning to return to the market with the restoration of interest tax deductibility rules. Agents are reporting strong interest for properties under $600,000 and multiple offers are common. This is likely to flow through to strengthening value levels over the next few months.”

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