NZ home prices stabilise as interest rises

Early signs of renewed buyer activity are emerging

NZ home prices stabilise as interest rises

Residential property values across New Zealand remained largely stable in May, with only minor movements recorded in most urban areas as the pace of market softening continued to ease. 

According to the latest QV House Price Index, the national average value rose marginally by 0.1% in the three months ending May 2025, reaching $913,772.  

While this indicates a halt in the sharper declines seen in previous quarters, values remain 1.1% lower than the same period last year and 14.1% below the market’s peak in late 2021. 

Among the major urban centres, Whangārei recorded the highest value increase at 3.2%, followed by Christchurch (1.3%), Nelson (1.1%), and Hastings (1.1%). Modest rises were also seen in Hamilton (0.5%) and Tauranga (0.2%). In contrast, declines persisted in Wellington (-1.7%), Palmerston North (-0.9%), Dunedin (-0.8%), and Auckland (-0.5%). 

According to James Wilson, QV operations manager, while the market is still adjusting, the rate of decline has slowed and some early signs of renewed buyer activity are emerging. 

“The housing market is still softening, but doing so at a slowing pace with signs of tentative confidence beginning to surface,” he said. 

Wison observed that lower interest rates have drawn more owner-occupiers back into the market, particularly those purchasing in the middle and upper-middle value brackets. Increased engagement in larger cities has contributed to the levelling of national values and reduced the number of regions recording losses. 

Investor interest has also picked up, especially in lower-priced and regional locations. This, combined with ongoing demand from first-home buyers, has created limited competition in certain segments. However, high inventory and seller caution continue to temper price movements. 

Wilson also pointed to external and domestic factors influencing buyer sentiment. Uncertainty tied to international trade disputes and geopolitical tensions, along with concerns about employment stability, continue to weigh on decision-making. 

“While we don’t expect a dramatic winter upswing, it’s likely we’ll see growing buyer engagement as confidence continues to build,” Wilson said. 

The May data suggest that while the national market is not experiencing strong gains, it is no longer seeing broad-based declines either. Regional variation remains, with some areas showing tentative increases and others continuing to fall, indicating a market still in a period of readjustment.