House prices have fallen 0.2 percent in the month and 0.6 percent so far in 2025. File photo. Photo: RNZ
House prices fell for the fifth month in a row in August, according to property data firm Cotality, but commentators say the "crash" is in the past.
It said prices fell 0.2 in the month and 0.6 percent so far in 2025, wiping out the gains recorded last year.
The nationwide median value is now $809,113, the lowest level since August 2023.
Values are still down 22.5 percent from the peak in Auckland, 25 percent in Wellington and 11.2 percent in Dunedin.
Overall, the country as a whole has prices 17.2 percent lower than the post-Covid records.
Some media commentary recently has highlighted the crash in values and the wider economic impact, but commentators say the major part of the downturn is the story of two years ago, and now the market is best described as flat.
"A lot of those falls happened over 2022 and 2023," Cotality property economic Kelvin Davidson said.
"In the past two years, it's been a lot flatter. They go up a bit, they do down a bit.
"Certainly in the last four to five months, we've seen that prices have just slipped ever so slightly backwards after a period tailing the last year where they rose a bit. So I think it's a little bit up and down, but the biggest falls, that peak to trough decline, a lot of that happened two years ago.
"Dunedin's a really good example. It was down last month, but up this month."
Auckland prices were down 0.5 percent in August, while Dunedin was up 0.4 percent.
Davidson said while it was not accurate to describe the current situation as a crash, "we're certainly not emerging into an environment just yet where prices are rising either. So it's sort of tracking sideways".
He said while Wellington's sharp downturn had petered out, prices were still falling more slowly, down 0.1 percent in August.
The tentative evidence that more economic resilience in provincial areas was also supporting property values continued, he said. Nelson, Invercargill and New Plymouth all recorded values lifting by at least 0.5 percent in August.
But Gisborne, Hastings and Napier were down 0.5 percent or more.
"We shouldn't get carried away with any flow-on effects from NZ's two-speed economy into provincial property outperformance, not least because some of the regions have their own challenges in terms of losing young people overseas during this current phase of strong migrant departures.
"That said, the longer the primary sector continues to grow strongly, the more cash will find its way into our regional towns and cities, giving property values some key support."
Davidson said he still expected the market to pick up towards the end of the year.
"We're just starting to see at the moment is that the stock on the market is starting to fall, and it's pretty broad based. It is happening in basically every region. Now, listings are still at a fairly high level, but they're starting to fall.
"And so spring will be interesting in the sense that, because sales volumes have been rising for a while now, if sales can continue to rise and also outpace the new listings that are coming on, then stock on the market will continue to go down. It'll still probably be a buyers market for a while, but just a little bit more competitive price pressure will emerge maybe the last few months of this year and into the early part of next year. So I think listings are a really important one to watch with the stock of property on the market."
He said the lagged effect of falling interest rates and improved affordability, as well as a falling unemployment rate, could also be expected to push prices up.
"I'm not saying it's going to be a boom because I think the mindset's still pretty pessimistic, but some of those things have been holding house prices back probably turn around. So a bit more growth in 2026, but yeah, got to get through the rest of 2025 first."
Westpac chief economist Kelly Eckhold said housing market activity was still reasonably robust.
People were borrowing money and investors were also returning to the market. "It's more kind of flat, that's how I tend to describe it to customers. In real terms prices are falling but that's good for a lot of New Zealanders."
Construction activity was also higher than it had been in the bottom of previous cycles, he said.
Davidson agreed there was still strong activity from first home buyers and a rising share of the market was going to investors.
"That includes the cliched 'Mum and Dad' investors who are no doubt enjoying lower mortgage rates and reduced top-ups on their rental properties.
"The psychology and mindset around house prices can change quickly, and we've seen that before. But right now, caution is the dominant theme, and with unemployment not expected to be at its peak just yet, it's unlikely that many people will be rushing out to bid up house prices aggressively over the rest of 2025."
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