Property Market Stagnates in November, Signals Potential Recovery

The property market in New Zealand showed no significant movement in November, as the national median value remained stable at $806,551. According to Kelvin Davidson, chief property economist at Cotality NZ, the market is currently in a holding pattern, largely influenced by higher inventory levels and ongoing concerns regarding unemployment. Data from November revealed a zero rise or fall in property values both for the month and the last quarter, with an overall decline of 0.7% for the entire year.

Davidson noted that while there were signs of gradual improvement in the economy and property market, job growth has been slow to materialize. The data showed mixed results across major cities. Auckland experienced a 0.2% decline, while Dunedin and Wellington saw slight increases of 0.1% each. Christchurch recorded a modest rise of 0.3%, with Tauranga and Hamilton gaining 0.6% and 0.7% respectively.

Regional Variations Highlight Market Dynamics

The property landscape across New Zealand remains uneven. In Auckland, the market exhibited a general weakening trend, marking the eighth consecutive month of decline with an overall decrease of 3.1% since March. The only area to note a slight increase was Waitākere, which edged up by 0.2%. Davidson emphasized that this continuous decline is affecting the national median value, as buyer caution and a surplus of listings play significant roles.

In Wellington, the situation was mixed. While Lower Hutt experienced a decline of 0.5%, Wellington City itself saw an increase of 0.4%. This trend marks two consecutive months of growth for the city, although the broader market remains sluggish, reflecting the general economic sentiment.

Provincial areas also felt the impact of the market’s stagnation. Notable declines were recorded in Napier (-0.3%), Hastings (-0.2%), and Queenstown (-0.6%). Conversely, Whangārei and Waihopai Invercargill distinguished themselves with rises of 0.5% and 0.8%, respectively, signaling pockets of resilience amidst a broader trend of stagnation.

Outlook and Future Prospects

Looking ahead, Davidson expressed cautious optimism regarding the property market’s potential recovery. He pointed out that recent decreases in mortgage rates could lead to a more favorable environment for property values as we approach 2026. In particular, improvements in housing affordability metrics may contribute positively to market dynamics.

Despite the current state of stagnation, Davidson highlighted that first-time buyers and small-scale investors remain active in the market. This continued interest may help to erode the existing stock of listings, especially if job growth gains momentum alongside an upturn in the economy.

Davidson concluded that while the current property value data reflects a holding pattern, the fundamentals hint at a potential shift towards growth in property values over the coming year. As the economic landscape evolves, the property market may gradually regain strength, driven by a combination of lower mortgage rates and an improving job market.