Wellington remains sluggish, while Auckland may be undervalued
New Zealand's housing market is creating a tale of two countries. While some regions seem to be presenting opportunities, others are struggling.
“‘Patchy’ is the word that sums up New Zealand's loan market,” Craig Pope (pictured above left), founder and mortgage adviser at Craig Pope Financial, told New Zealand Adviser. "There are different pockets around the country. But it's still a little bit up and down, a little bit patchy, a little bit constrained at the moment."
Adrienne Begbie (pictured above centre), managing director at non-bank lender Prospa New Zealand, agreed.
"I think there's just still some pain to come through," she said. "We're coming out of two technical recessions.
"But there's green shoots and we can see the way through the tunnel," she said. "So we can actually see a way out of it now."
New Zealand's narrative of conflicting forces includes Kiwis in the midst of rising unemployment and falling property prices, causing some would-be buyers and sellers alike to remain cautious. Meanwhile, falling interest rates – and the possibility of further rate cuts later this month as the Reserve Bank of New Zealand (RBNZ) meets – have acted as a stimulus to the economy. But not all regions are reacting equally.
"In terms of the Wellington region, it's a little bit start-and-stop," said Pope, who is also based in Wellington. "One minute, there's a little bit of growth and a lot of activity at open homes. And then the next minute, it pulls back and it quietens down.
"Confidence is still pretty low around Wellington, with the government having cut quite a few jobs, and then you couple that with the economic state across the country," Pope said. "It's made the Wellington region a little bit more subdued, and people have been a bit cautious about entering into the market. And subsequently, Wellington has seen a few more sales listings, as people are potentially moving on to other areas. The vibe around Wellington is, people are feeling that the city's got a few challenges as well with its infrastructure. So all of that sort of coupled together makes things a little bit sluggish."
John Moody, chief financial officer at non-bank lender Basecorp NZ, added that Wellington's rapid rise in home prices circa 2020 and 2021 made the city "more susceptible to falls."
During the height of the pandemic, many people were retreating to New Zealand as a safe haven, causing property prices in Wellington to rise 25% from 2020 to 2021, according to the Reserve Bank of New Zealand.
"You couple that with a lot of the uncertainty around the government job market, in particular with the new government, and it's a recipe for a challenging property market," Moody said.
Meanwhile, some say Auckland's property market is encouraging.
While the nation's largest city began 2025 with an elevated property supply, prices have been holding steady. This could signal a bottom of the market – and an opportunity for new entrants.
"We're seeing a lot of investors looking in Auckland at the moment, because history shows that the growth can be better there, if it's considered to be undervalued at the moment," said April Hastilow (pictured above right), Christchurch-based mortgage adviser at Opes Mortgages. Her firm tracks undervalued and overvalued property markets around the nation.
"Auckland, at the moment, according to our statistics, is showing that it is currently undervalued, meaning that there are better deals to be had there, if the growth in Auckland sustains as it has previously," Hastilow said. "And that's not just taking the COVID[-19] years [into account]. It's taking a little bit more than that. We're seeing a huge drive towards Auckland with investors at the moment, looking to purchase there this year."
But Lucia Xiao, founder and adviser at Finax Mortgages, warned of Auckland's distinct challenges.
"The Auckland Unitary Plan (AUP) has unlocked opportunities for development, but also created an oversupply of new builds," she said. "Talking to some local real estate agents reveals an oversupply of two-bedroom properties and an abundance of three-bedroom ones."
What advisers can do
No matter the market, Pope pointed out that there are still lots of opportunities for advisers.
"At the end of the day, it's still a flat sort of period of activity," he said. "But people are still downsizing and upsizing their houses, or refinancing. So there's still a reasonable amount of activity amongst existing borrowers. It's a big part of the business: trading up, trading down, moving sideways, refinancing. And as an adviser, you're still hunting for a few more first-time buyers. You're farming your existing client base and reviewing existing people's mortgages more to try and keep the wheels turning."
