New Zealand property values stalled in May, as a cautious stance from both buyers and sellers kept the housing market in neutral.
Cotality NZ’s latest Home Value Index (HVI) shows the national median value in May of $808,187 was flat compared to the previous month and -0.1% lower than three months ago. Values were also -0.6% down from a year ago and still -17.0% below the peak in early 2022 of $974,002.
Home Value Index
National and main centres
Across the main centres, Ōtautahi Christchurch rose by 0.4% in May, while Ōtepoti Dunedin and Tauranga both edged up by 0.2%. Kirikiriroa Hamilton saw a minor 0.1% rise, but Tāmaki Makaurau Auckland (-0.2%) and Te-Whanganui-a-Tara Wellington (-0.3%) both fell again.
Cotality NZ Chief Property Economist, Kelvin Davidson said that May’s flat result was a continuation of the sluggish property market trends seen so far in 2026, with no clear directional change in sight.
“Property values are generally stuck in neutral at the national level, with buyers in no major rush, but sellers not having to capitulate either.”
“There are differing patterns beneath the surface. Key areas, including Auckland and Wellington are still subdued, while even ‘strong’ markets such as Christchurch or Invercargill aren’t racing away.”
“Interest rates have already lifted in recent months and there’s likely to be more to come the longer the Iran conflict continues.”
“At the same time, consumer and business confidence has been hit hard, and there are other signs of economic weakness coming through, such as falls in retail spending.”
“It all adds up to significant headwinds for sales activity and property values in the coming months.”
“The marked improvement in housing affordability in the past 4-5 years will tend to limit any further downside for the market. Nevertheless, renewed, modest declines in property values in the coming months would not be a surprise.”
Tāmaki Makaurau Auckland
The small drop in values in May for Tāmaki Makaurau Auckland as a whole reflected pretty consistent falls in each sub-market, other than Rodney (+0.2%) and Franklin (0.0%). Elsewhere, there were consistent drops of either -0.2% or -0.3%.
The gaps aren’t huge, but Auckland City has still underperformed over slightly longer horizons of three months (-0.8%) and twelve months (-4.1%), although the drops from the peak have been ever so slightly larger in Manukau (-24.5%) and Waitakere (-24.9%).
Mr Davidson said, “May brought more of the same for property values in Auckland – a general drift downwards, with market sentiment seemingly remaining very subdued.”
“It’s true that housing affordability has improved significantly and this will tend to dampen the speed or size of any further drops in values.”
“But the supply pipeline of new townhouses across the super-city remains appreciable and this means purchasers are still in the box-seat, whether they’re first home buyers, or even investors looking to expand their portfolio.”
Te Whanganui-a-Tara Wellington
It was a mixed bag across the Te Whanganui-a-Tara Wellington area in May, with Kāpiti Coast rising by 0.7%, Te Awa Kairangi ki Uta Upper Hutt seeing a 0.3% gain, and 0.2% in Porirua. Yet Te Awa Kairangi ki Tai Lower Hutt dipped by a minor -0.1%, with Wellington City itself showing a more significant -0.6% monthly decline.
That being said, only Wellington City has (just) avoided a drop over the past 12 months, while all sub-markets in this area are still showing falls of more than 21% from peak. Lower Hutt at -27.3% has seen the largest fall of any territorial authority in the country.
Mr Davidson noted, “an increase in physical property supply in some parts of the wider Wellington area will have played a role in the weakness of values in recent years. But it seems that the far bigger factors will have been the previous boom and sharp reduction in affordability, which created the scope for subsequent large falls in property values, and then just the underlying weakness of the area’s economy – as the public sector now faces even more cuts.”
“Of course, there’s always two sides to the housing market and first home buyers who are confident of their own financial resilience are taking full advantage.”
Regional results
By contrast with some of the larger centres, many provincial markets saw flat or slightly higher results for values in May. Granted, Heretaunga Hastings edged down by -0.4% and Whangārei saw a minor -0.1% dip.
But there were gains of 0.2% or slightly more in Tāhuna Queenstown, Tairāwhiti Gisborne, and Waihōpai Invercargill, while Rotorua (0.6%) and Whanganui (0.8%) recorded stronger increases.
Over a 12-month horizon, the growth in values has been at least 4% in Tairāwhiti Gisborne, Tāhuna Queenstown, and Waihōpai Invercargill, although negative in some other areas, including Whakatū Nelson, Ahuriri Napier, and Heretaunga Hastings.
“It’s not easy to put a blanket over all of these areas and say that one or two factors explain everything – after all, primary industries are generally faring well, yet parts of Hawke’s Bay are still showing sluggish property values.”
“But the strength of the farming sector no doubt helps to explain continued growth in property values in many parts of Southland, while Queenstown is probably still riding the tourism rebound and the continued wider appeal of the area to wealthy buyers.”
Property market outlook
Looking ahead, Mr Davidson noted that there’s still a tricky balancing act for the Reserve Bank to pull off, which will have effects on the property market.
“The longer the OCR stays on hold the greater the chances inflation is harder to rein back in again – which will tend to put more upwards pressure on mortgage rates.”
“But the quicker they move, the higher are the chances of a marked weakening in the economy, with associated knocks to household confidence, the labour market, and also property sales and house prices.”
“Clearly, the housing market is not a direct consideration for monetary policy anyway. But in these uncertain times, it may still be caught in the cross-fire – with an OCR rise now looking likely in July – especially as more existing borrowers start to roll off older mortgage terms and onto higher rates.”
“Of course, what’s potentially disappointing for some is great news for others, and first home buyers confident about their income and financial resilience should continue to find good opportunities in a market where listings remain elevated.”
“To some extent that applies to investors as well. But this group has other concerns, such as the looming election and scope for capital gains tax if we see a change of government, as well as interest deductibility potentially being phased out again too.”
“All in all, housing market conditions remain challenging. Having previously anticipated sales volumes rising from around 90,000 in 2025 to 100,000 this year, the market may actually do well to hold at similar levels to last year. This points to a sluggish outlook for values too,” Mr Davidson concluded.
