Subdued on the surface but there’s still plenty happening if you look closer

Sales volumes are just ticking along

Housing market activity remains a little sluggish, with both buyers and sellers continuing to act cautiously. There were 6,935 property sales across NZ in July, down 6.4% from a year earlier and the seventh annual fall in a row. The 12-month total has eased to 89,385, which is still decent by long-term standards, but below December’s mini-peak of 91,411. With agreed sales slowing and new listings continuing to arrive, the stock of property for sale remains high. Buyers therefore retain much of the pricing power, although stable employment means most vendors are not being forced to sell either.

Property values are also treading water

Amidst this backdrop, the latest Cotality Home Value Index showed a -0.4% fall in August, marking the fifth consecutive monthly decline. National values are now down 1.3% over the past three months and 1.0% compared with a year ago, with the median value sitting at $797,944. Values remain 18.2% below the January 2022 peak. Auckland and Wellington continue to be the softer main centres, while Christchurch remains one of the more resilient major markets. This is not a fresh downturn so much as a prolonged holding pattern following the larger falls of 2022 and 2023.

A great time to be a buyer

Of course, there are always two sides to the housing coin, and these remain favourable conditions for first home buyers. Their market share reached a record 29.0% in July, with the number of purchases still rising despite the wider slowdown in activity. Lower house prices, elevated listing volumes, KiwiSaver withdrawals, and access to low-deposit lending continue to support this group. Movers remain quiet, while mortgaged multiple property owners are being more selective. Investors face subdued rents, higher operating costs, election uncertainty and possible tax changes, alongside more conservative expectations for long-term capital growth.

Conditions are shifting in the mortgage market

Turning to the mortgage market, lending activity has now clearly slowed – albeit from a high base. July lending totalled $7.9 billion, down $1.2 billion from a year earlier, with both house purchase activity and bank switching easing. Even so, repayment stress remains low, refinancing activity is still elevated by historical standards, and first home buyers continue to make significant use of low-deposit lending.

Borrowers have also increasingly been fixing for longer periods, particularly around two years, as insurance against further rises in mortgage rates – which now seem even more likely given the latest official cash rate moves from the Reserve Bank.

More of the same ahead?

It seems reasonable to suggest that the broad holding pattern will remain in place for a while yet. For a start, the election is now looming large. And the jobs market isn’t expected to improve until 2027.

Kelvin Davidson
Cotality NZ Chief Property Economist

September 2026

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