New Zealand's property market shows signs of recovery, CoreLogic data suggests
Property values in New Zealand experienced a slight increase of +0.3% in February, signaling an end to the minor downturn of 2024 and setting the stage for potential growth in 2025.
After a cumulative decline of -4.1% from March to September last year, the CoreLogic Home Value Index (HVI) has begun to show modest upward movements, with this month’s rise marking the strongest since January of the previous year.
Stabilising values across major urban centers
Despite a minor drop of -0.2% in Tauranga, major urban centers like Christchurch and Dunedin saw increases of +0.6%, and Hamilton rose by +0.5%. Auckland and Wellington also experienced growths of +0.3% and +0.1%, respectively.
This represents a notable change from the consistent falls observed in previous months.
Kelvin Davidson (pictured), CoreLogic NZ’s chief property economist, commented on the modest growth, amidst increasing positivity among Kiwis about the housing market.
“The rise of 0.3% in the national median property value is fairly modest by past standards but represents the first meaningful increase for more than a year,” Davidson said. “It was always likely that the property value falls in 2024 would come to an end at some stage in early 2025, given the extent of interest rate cuts since last year.”
Regional recovery mixed, tauranga faces continued challenges
Davidson said that while some regions are seeing recovery, others like Tauranga continue to face challenges.
“While some markets have clearly turned a corner, there’s still variability, with Tauranga edging lower in February,” he said. “The overall growth figure masks local variability.”
Outlook for the NZ property market
Looking ahead, Davidson suggested that while property values might not see consistent growth every month across all regions, the general conditions are favourable for a gradual rise over the medium term.
“With mortgage rates falling and positive developments in the economy and labour market, we’re seeing renewed interest from mortgaged investors,” he said. “However, the potential boom seems unlikely due to various factors, including abundant listings and regulatory restraints."
Opportunities and predictions for home buyers and investors
The property market's dynamics are likely to facilitate more property sales in 2025 compared to the previous year, with values expected to rise.
“All in all, there are likely to be more property sales in 2025 than in 2024, with values rising,” Davidson said. “But there are also enough reasons out there to think this upturn will be more muted than in the past.”
Read the CoreLogic NZ report here.
