NZ housing market drops despite monthly rebound, new report states
The national housing market has decreased in value by 1.2% year-on-year, despite a monthly uptick of 1.4%.
That is according to the Real Estate Institute of New Zealand (REINZ) House Price Index (HPI) report for February 2025.
Auckland continues to lead the downward trend with properties losing 2.3% of their value over the past year, while areas outside Auckland showed a more modest decline of 1.0%.
This marks a prolonged cooling period since the market peaked in 2022, as illustrated in the report's price index charts.
"The REINZ HPI takes many aspects of market composition into account and thus provides more accurate results," said Jen Baird, chief executive at REINZ. "When applied to the February data, the HPI indicates that the housing market value nationwide has decreased by 1.2% year-on-year."
The report highlights regional variations, with Southland showing the strongest annual performance. Tasman/Nelson/Marlborough/West Coast and Canterbury regions ranked second and third respectively for positive annual percentage movements.
Interestingly, the Otago region demonstrates how the HPI provides deeper insights than median sale prices alone. While Otago's median sale price decreased 1.9% annually (the sixth-worst regional performance), its HPI showed only a 0.1% decrease, making it the fourth strongest region by this measure.
"Long-term property value growth in Otago has remained constant whereas many other regions have decreased, a fact that would have remained hidden from those monitoring statistics without access to the HPI," Baird explained.
Within Auckland, considerable variation exists across different districts. North Shore City emerged as the only area showing positive annual growth at 0.4%, while Auckland City recorded the steepest decline at -3.6%.
The South Island generally outperformed the North Island, with Nelson City recording a 2.8% annual increase and Invercargill City leading all major urban centres with a robust 4.0% annual growth. Christchurch City also maintained positive territory with a 0.9% year-on-year increase.
Looking at the five-year compound growth figures, most regions still show positive long-term trends despite recent cooling. Christchurch City leads major urban areas with an 8.1% five-year compound growth rate, while Queenstown-Lakes District follows with 7.6%, suggesting that tourist destinations and lifestyle areas continue to hold long-term appeal for property investors.
The data suggests New Zealand's housing market is experiencing a gradual correction rather than a sharp decline, with some areas showing resilience despite the overall cooling trend.
What do you think of this mixed trend? Let us know what you think.
