The housing market ignored normally positive influences such as improved affordability, lower mortgage rates and a gradually strengthening economy, starting 2026 in a "subdued fashion," according to property data company Cotality.
"National median values fell a modest 0.3% over the three months to January, taking values to 17.5% below the 2022 peak," Cotality said in its latest Housing Chart Pack report.
"Auckland and Wellington continued to underperform, while markets such as Dunedin and Invercargill were more resilient in January," the report said.
Cotality NZ Chief Property Economist Kelvin Davidson said the flat performance in property values may disappoint some vendors, but it offered improved opportunities for buyers.
Property sales volumes were also softer in January, with sales transacted both privately and through real estate agents down 10.7% compared to January last year.
The rental property market was also undergoing a downward reset.
"The rental market has softened as net migration has fallen sharply and the number of properties available to rent remains elevated," Cotality said in its commentary.
"With rents already stretched relative to incomes and wage growth easing, there is limited scope for further increases and the recent falls [in rents], while rare, reflect a reset after a period of very strong growth," Davidson said.
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32 Comments
I question calling house price stability "underperforming"
Agree. There's a lot of language used by the media that reinforces the assumption that house price increases are positive, while price mean reversion is negative. Cheaper house prices will be good for everyone who doesn't own a house so it would be good to use more objective language.
If we have done effectively nothing to resolve the high costs of housing, then prices falling usually coincides with negativity across the entire economy.
Would you say non home owners were much better off over the period of 22-24' (or 23-25, whenever we had the correction)? House prices down, employment down, inflation up. Oh, and it's now 50% more expensive to build a new unit of housing, once things right themselves.
The pattern just repeats unless something is actually done to address the problem. Or it all breaks.
It is very simple, specuvester recent decade landlords, who purchased rentals not paying a minimum of 8% yields- have paid too much and will be parted with a big sum of their money.
They are just speculators of CGs, which won't be back for many years, until prices drop to allow the required 8% returns.
All holding costs, especially insurances and interest rates, going up bigtime and rents falling. It was all obviously going to happen.
Falling home prices, is very positive for NZ.
Can you show me an economy or society that's experienced a precipitous fall off in housing demand that's resulted in a positive outcome for the majority of its population?
It's all like Jenga.
New Zealand 2026-2030 :) - at least more doctors will stay
Iceland after GFC
I know it's not a country, but it's comparable: Texas after GFC
Their housing markets both recovered as their economies recovered.
I'm talking about a scenario where house prices shit the bed permanently, and the rest of the economy recovers and the population ends up better off.
I believe, for our economy to recover, house prices need to recover. People feel they have less worth. This slow spiral down in prices is not good for NZ's economy.
If it ends the NZ problem of blind obsession with "investment property" and directs these funds into productive business - its truly great long-term!
FYI- investment property since 2021, have proven and will continue to be really bad, loss-making, investments!
Which "productive business" to hand your lifetime savings to would that be?
Annnyyyttthing that does not lose -30 to -45% real losses, like property has.
Property has been the worst inflation hedge and consistant loss making business to be in since 2021, and its decline is far from over!
"It's not timing the market, it's time in the market"
Annnyyyttthing that does not lose -30 to -45% real losses, like property has
So basically you have no idea, and things like "productivity" are just buzzwords.
Hot tip, in an environment where houses drop 30%, many businesses and jobs drop 100%.
The obvious answer is don't pick just one business.
There's a few capital raises going around right now, I'm considering whether to give my money to contact to build more electricity supply at a solid margin, Santana who have a huge gold field in Otago and are going through the fast track process, and unlisted Veriphi who are developing a drug administration safety product. None is more than 2% of my life savings.
This helps exemplify the problem.
A "good" business in NZ maybe makes 10% net income.
Many good businesses struggle scaling.
So the returns for investing in a semi predictable, good business are not very high.
As an investment option then, you will want to go for a high payoff punt. Pre revenue.
Which you won't want to bet the farm on, unless you definitely knew the outcome.
10% return for a predictable business with no hands on work is fine with me, beats buying a rental. The more speculative stuff, i certainly don't bet the farm on it. Some win, some lose.
I'm sure there's higher returns to be made in hands on investment, but i like my current job.
NZ Geko you suggesting investing in businesses instead? Hope not, according to the business.govt.nz website, about one in ten small businesses fail in their first year, and 70 percent capsize within the first five years. Far more likely "be really bad, loss-making, investments."
Gecko suggests someone should invest in business.
Personally Gecko prefers the speculative, non productivity improving investment of shiny yellow rocks.
Gekko is part of the same problem.
Without increasing prices people are less confident to leverage their equity in the family home to start a business, which is much easier than trying to get a business loan given 60% of bank lending is property related. Also this equity could be leveraged for home renovations in the expectation it will add exponential value when eventually sold. without the expectation of capital gain, people will not use this equity, there will be lower velocity of money, and here we are. Expectation is everything - as economics isn't really about money, it is about human behaviour.
So the problem isn't with lower house prices it's with the absolute need to borrow to do anything. I guess sating that need is all good till the debt gets to high to pass on to the next generation, probably at about 150% of gdp?
Agreed, we have been selling houses to greater fools for the better part of 30 years for profit, and that stream has more or less dried up to a trickle. Without new mortgages lending money into existence for constant increasingly valued churn, we then have to look elsewhere to make the money slush around and grow the money supply. We are realising that 'elsewhere' is injecting nowhere near as much money into circulation, and increasing the velocity of money as property has done for years past.
Probably true at the moment. But we should aim to decouple property prices from the wider economy. It's holding back productivity. Not enough capital in productive sectors. Too much sucked into real estate and associated finance products and sectors.
How we got to this dependency of ever higher property prices to keep our wellbeing in check is what needs to change. We shouldn't be measuring our financial and societal success by the value of our houses. And yet here we are.
Tricky isn't it. When those who already own swathes of property (even 1-2 extra) from pre-2020 will be makin out like bandits and everyone wants in on it, but the yields just aren't there in most of the country now. Rentierism has a long history spanning many empires however, and no matter how many resets the world, or a society has, it always winds up the gold standard for passive income and wealth.
"Auckland property prices surge back above the million-dollar mark"
Stuff home page this morning
https://www.stuff.co.nz/home-property/360939733/auckland-property-price…
Dross news articles, run by their REA masters.
Trademe price data is irrelevant but listing and search volumes are relevant.
Listings tightening, down 8% yoy.
Search volumes up 40-50%.
Cheers 2026 🥂
These cotality numbers are 3 months old covering the dead Xmas period.
Dairy up.
Migration rising again.
Recruitment increasing.
Critically sentiment improving.
Position for some strong NZ years 💪🥂
Sorry to hear, your boats loaded with loss making, dead money, investment rentals CdZorr.
Thought of ditching them, before they plumb even deeper, ocean trenches?
You're obsessed with rental property.
The above post was conveying good thoughts for NZ farmers, all the kiwis now picking up more work hours and permanent employment, a welcome to our new kiwis arriving in greater numbers. Not to mention less kiwis heading offshore as NZ becomes attractive once again as the cycle turns, as it always does.
This time it's not different!
🥂
What will the comming 6% + mortgage rates do??.....
MaccyB has it right, Biggest crash ever, still playing out in REAL terms!
New Zealand's housing crash restores affordability - MacroBusiness
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