79% of NZ Suburbs Are Sliding: When Could Property Values Recover?

Nick Goodall (00:01):
Kia ora and welcome to the New Zealand Property Market Podcast, brought to you by Cotality for the 14th of September 2026. I'm Head of Research Nick Goodall, and today I'm joined as per usual by Chief Economist Kelvin Davidson. Kelvin, a bit of a slower week in property news, which is maybe fitting given you've had a lads' weekend away and might be feeling a bit slow yourself on a Monday morning. Let's get into the release of the Mapping the Market data last week. How did the release go and what did the data tell us?

Kelvin Davidson (00:29):
The last few days have been a bit of a blur, to be honest, so I'm pushing hard to remember last week's release. Mapping the Market goes into suburb-level detail using the same methodology as the monthly Home Value Index, but splits property types into standalone houses and townhouses to give a granular view. People can look up their own suburb's values and trends on our interactive map

Overall, the three months up to September showed a slightly softer tone. We had approximately 79% of suburbs mapped for standalone houses show value declines, and about 74% of suburbs for townhouses drift lower. While many of these falls were minor—around half a percent to one percent—it confirms the caution out there

Mortgage rates have snuck up, and while some economic indicators are improving, labour market uncertainty remains.

Geographically, the suburbs posting growth tend to be in Southland, Canterbury, and Otago, supported by a healthy farming economy. Conversely, suburbs in Auckland and Wellington sit at the bottom of the list, reflecting a softer services-driven urban economy. The data matches our higher-level trends but provides that crucial local detail for real estate professionals and mortgage advisers

Nick Goodall (03:34):
Exactly. This is excellent data for local property professionals to use with clients, and the interactive map on our website makes it incredibly easy to toggle between townhouses and houses to see the divergence in performance. Auckland and Wellington are showing the most pronounced softness. Standalone houses and townhouses continue to track closely, whereas Auckland apartments—which are excluded from the suburb map due to lower volumes—have shown distinct weakness recently.

This quarterly suburb release highlights that affordability is still key; lower-median suburbs in the provinces are performing better than more expensive areas in the major urban centres.

Looking at economic indicators, we have the official Q2 GDP release coming out this Thursday. Ahead of that, we received the Performance of Manufacturing Index (PMI) late last week and the Performance of Services Index (PSI) this morning. How do those shape the outlook, Kelvin?

Kelvin Davidson (07:22):
The recent monthly indicators are looking slightly better. The Performance of Manufacturing Index (PMI) rose for the 14th consecutive month, remaining above the neutral 50.0 threshold. Manufacturing accounts for roughly 8% of New Zealand's economic activity, so consistent growth there is a strong positive.

Additionally, the Performance of Services Index (PSI) came in at 51.2 this morning, marking its third consecutive month above neutral expansion. The services sector has had a tougher run, but a turnaround here will provide welcome relief to services-reliant economies like Auckland and Wellington.

While these numbers are positive, they probably don't derail the Reserve Bank's OCR outlook

The RBNZ's forecasts anticipate an expanding economy that is strong enough to withstand higher rates as they focus on curbing inflation. This resilience simply confirms that their economic forecasting models are tracking accurately

It's positive news, but nothing to get carried away with.

Nick Goodall (10:45):
Agreed. The fact that manufacturing is holding up despite global energy costs and shipping disruptions shows real industry resilience. Looking at major bank forecasts, most economists expect Q2 GDP to land between a +0.1% and +0.3% quarterly increase, which is stronger than expectations from a few weeks ago. The Reserve Bank's live GDP tracker has the June quarter sitting at +0.2% and currently projects the September quarter (Q3) to expand by +0.9%.

This economic resilience suggests the RBNZ won't be held back by growth concerns if they need to raise the OCR again. While a pre-election hike on October 28 remains highly data-dependent, a resilient economy means they won't hesitate to lift the OCR toward neutral if Q3 inflation remains sticky. They've shown they prefer to hike sooner and adjust downward later if required.

Also this week, look out for Kelvin's article looking at raw transaction numbers for first-home buyers, rather than just market share percentages, which will provide some great extra detail.

Tell us about your lads' weekend, Kelvin.

Kelvin Davidson (16:51):
We headed to Napier to catch up with high school mates, some of whom I've known for over 40 years. We caught up on the same old stories, supported the local hospitality industry, and did some land-sailing on Saturday afternoon. I vaguely kept up with the sport but was largely focused on socializing. It's a great circuit breaker once a year. How was your weekend, Nick?

Nick Goodall (19:33):
Similar to my recent trip to Whangārei. On the sports front, the Taniwha successfully defended the Ranfurly Shield again on Saturday night, beating Waikato. We have one more shield defence coming up against Counties Manukau, and the team is sitting third on the NPC table heading into a match against Wellington here this weekend.

The All Blacks suffered their third consecutive loss to the Springboks. While it's frustrating as a fan, the Springboks are a formidable, flawless side at the moment. Looking at the long-term view ahead of next year's World Cup, the All Blacks are close to their level, but we have work to do on the scrum. The Warriors also fell to the Dolphins in the NRL but have a crucial match against the Knights at Eden Park this week.

Kelvin Davidson (24:25):
The All Blacks and the Warriors both face tough roads ahead, but you have to beat the best to win championships. It's unusual to see three All Black losses in a row, but that's sport.

Nick Goodall (25:21):
Exactly. We've spent more time on sport than property today, so we'd better wrap up. Don't forget to check out the Mapping the Market interactive map on our website. My name is Nick, he's Kelvin. You've been listening to the New Zealand Property Market Podcast. Mā te wā.