Housing market close to a trough

By: Scott Mears - Aspire PRO Enterprises

In January 2025, New Zealand's housing market exhibited signs of nearing a trough, with national property values experiencing a modest decline.

According to CoreLogic's latest report, the country's median house value decreased by 0.1% in January 2025, marking the ninth drop in the past ten months. This brought the national median value to $803,624, approximately 3.9% lower than the previous year and about 17.6% below the post-COVID peak. 

Regionally, the data presented a mixed picture. Cities like Hamilton, Tauranga, and Dunedin saw slight increases in property values, while Auckland and Wellington continued to face downward pressure.

Kelvin Davidson, CoreLogic NZ's Chief Property Economist, noted that December had a mild decline which encapsulated the market's subdued performance throughout 2024.

He highlighted that while high mortgage rates initially contributed to the downturn, recent labor market weaknesses have also played a role. Looking ahead, there is cautious optimism for 2025.

With inflation under control and falling mortgage rates, the market is expected to see increases in property values and sales.

Davidson anticipates that property values could rise by around 5% across New Zealand in 2025.

However, he also warns of potential challenges, such as the introduction of debt-to-income ratio rules and ongoing economic uncertainties, which may temper the market's recovery. 

In summary, while the New Zealand housing market has faced a period of decline, indicators suggest it is approaching a trough. The combination of stabilising factors and emerging challenges will likely shape a year of slow recovery in 2025 in NZ.

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