There’s no clear direction yet for the property market
The Cotality Home Value Index showed a -0.3% fall at the national level in July, which obviously isn’t a big drop, but nevertheless it was the fourth in a row. The national median value now stands at $804,303, down by a subtle -0.7% from a year ago and still -17.7% below the January 2022 peak – albeit +16.0% above the pre-COVID level from March 2020.
It’s a holding pattern but with regional variability
But despite some recent falls in values, if you take a step back, the market generally remains in a holding pattern. Sales volumes have been largely drifting sideways in 2026, after previous rises in 2024 and 2025, and with new listings always coming to the market, the stock of property available for sale remains at multi-year highs. This makes it a buyer’s market and means that it’s no surprise to see reasonably sluggish property values.
Of course, there’s never just one, single market. For example, key main centres such as Auckland and Wellington remain subdued, with economic confidence lacklustre, and the new housing supply pipeline still elevated (especially in Auckland). By contrast, Christchurch and Dunedin have continued to show modest gains in property values, while the Southland region has been increasing – especially Invercargill, where values have risen by more than 8% in the past year.
The economic backdrop remains highly uncertain
After looking more settled for a short period, the renewed flare-up in US-Iran tensions more recently has put the long-awaited NZ economic recovery back on ice for now. Firms remain in a cautious mood and the unemployment rate is still above normal – a key restraint on housing market activity and price momentum. That being said, at least our farming and exporting sectors are faring well.
There’s also now a challenge for the housing market coming through in the form of fresh inflation pressure and the first OCR increase from the Reserve Bank in early July – with more to come before the end of the year too. At this stage, an OCR rise to 2.75% looks likely in early September and increases in mortgage rates themselves are now filtering through from more banks.
There are still delicate decisions for borrowers
Against this backdrop, the RBNZ figures show that two-year fixed rates remain the most popular choice for new borrowers (and probably those existing borrowers with loans rolling over too), providing a decent mix of certainty but not too much loss of flexibility either. Of course, with the gap between longer and shorter-term fixed rates recently widening a bit, that certainty of a two-year fix is starting to come with a bit more cost too. It remains a delicate decision for borrowers, and their advisers.
In the meantime, there’s still quite a bit of bank switching taking place, with many borrowers still having flexibility to chase a new cash-back from a different lender. All in all, the housing market itself remains sluggish, but borrowers are always busy.
Kelvin Davidson
Cotality NZ Chief Property Economist
August 2026
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