Monthly Property Insights

The Cotality Home Value Index showed another subdued result in January, with the national median edging down by -0.1% over the month, leaving it at $802,617. That’s -1.0% below the same month in 2025 and also -17.5% less than the January 2022 peak. A lot of that decline happened in 2022 and 2023, with 2024-25 a lot flatter. But even though the true downturn is behind us, the early signs of an upturn are proving elusive. What else is happening beneath the surface and what could 2026 hold?

There’s still variability by region and property type

Looking across the geographical split in January, Auckland (-0.3%) and Wellington (-0.1%) continued to underperform, with Christchurch and Hamilton both flat. Tauranga (+0.3%) and Dunedin (+0.4%) showed a little more resilience. Meanwhile, smaller parts of Canterbury (e.g. Ashburton) continue to fare pretty well, as does Invercargill. Indeed, over the past 12 months, Invercargill leads the country in terms of value growth, at 5.5% – just ahead of Gore at 5.4%.

Clearly, more favourable affordability will be playing a role in the resilience of property values in these provincial markets. It’s certainly easier to stretch an extra $10,000 to buy a house when the value started at a lower level anyway. But the shape of the economy at present will also be bolstering markets such as Invercargill and Ashburton, with farming still pretty strong.

Meanwhile, there’s also gaps in value performance when you look at the data by property type too. Across NZ as a whole, standalone house values ‘only’ dropped by -0.7% in the year to January, with townhouses down by -1.7%, and apartments by -4.1%. Given apartments are only really found in Auckland and Wellington, this helps to explain the wider weakness in those areas.

The slight underperformance by townhouses likely reflects the continued pipeline of new construction coming through, and some concerns about apartment insurance premiums (especially if they’re at seismic risk) may be weighing on values in that segment to an extent.

Borrowers make hay with the 1.5% cashbacks

Turning to the mortgage market, the Reserve Bank’s data for December was striking. Total gross lending flows for the month were $14.1bn, a hefty $3.6bn more than the previous strongest month in March 2021. To some extent, it reflected a rise in loans for house purchases, but the big impetus really came simply from ‘refi’. This was $5.8bn, way above the previous high of $2.6bn in July last year.

Clearly, huge numbers of people who were floating, at the end of a fixed rate, or who could get out of their current deal cheaply decided to take advantage of the 1.5% cashbacks that were on offer in November, which hit the data in December once the loans had been drawn down. Interestingly, it seemed to be ‘safer’ borrowers who switched lender – yes, there were some big loans changing hands, but for borrowers with large incomes too.

Sales and values should rise this year, but maybe not immediately

With housing affordability better, mortgage rates lower than before, listing stocks easing downwards, and the economy slowly improving (albeit the unemployment rate edged up to 5.4% in Q4 last year), 2026 should be a stronger year for property sales and house prices. But the ‘animal spirits’ in the housing market aren’t quite there just yet, so clearer evidence of the upturn may not come through straightaway. There’s still a clear window of opportunity for first home buyers.