Cotality says elevated stock levels and rising mortgage rates are making buyers cautious

Residential property values declined for the fifth consecutive month in August, according to the latest Cotality Home Value Index.

The national median dwelling value was $797,944 in August, down 0.36% for the month, down 1.29% over the last three months and 0.97% lower over the last 12 months.

The Index figures show a sea of red (see the tables below) with values declining in most parts of the country over the last year.

The biggest annual declines in value were mostly in smaller provincial centres, led by Horowhenua -6.37%, followed by Otarohanga -6.15%, Carterton -5.59%, Tararua -4.83% and Hastings -4.35%.

In the main urban districts results were mixed, with annual losses in Auckland -2.58%, Waikato -0.45% and Wellington -2.48%, while value gains were recorded in Bay of Plenty 1.59%, Canterbury 3.24% and Otago 2.32%.

Cotality Chief Property Economist Kelvin Davidson said the latest results reflect a housing market characterised by caution rather than distress.

"Economic uncertainty, rising mortgage rates and a high level of properties available for sale are giving buyers little reason to rush," Davidson said.

"At the same time, sellers generally aren't under significant pressure," he said.

"Labour market conditions have softened, but widespread job losses haven't emerged, allowing many vendors to remain patient and hold relatively firm on pricing."

"The result is a market where sales activity has gradually slowed through 2026 and property values have continued to drift lower."

"Most of the heavy price correction occurred in 2022 and 2023, but conditions have remained subdued since then," Davidson said.