Regional affordability shines in flat NZ housing market

The New Zealand property market has continued to trend sideways at best over the past three months, experiencing a slight downward drift in values amid sluggish sales activity.

The latest update of Cotality’s Mapping the Market interactive tool, which tracks suburb-level property insights across the country shows nearly four in five suburbs (79%) recorded falling values for standalone houses over the three months to September.For a fair proportion of these declining suburbs, the dip was minor at -1.0% or less, while around 300 (of 1,422) suburbs held stable or rose. But on the other hand, this still left more than 750 suburbs where house values dropped by more than 1%.A similar pattern played out in the townhouse segment, where almost three in four (74%) suburbs recorded value drops, including 22 areas where declines reached -5.0% or more since June. Only slightly more than a quarter (26%) of townhouse markets held flat or posted gains.

Cotality NZ Chief Property Economist Kelvin Davidson noted that this broad-based sluggishness across suburbs aligns with cautious buyer demand and elevated inventory.“Sales activity has made a slow start to the year, showing modest declines each month compared to the same period in 2025.”“This careful demand is in line with the broader downward drift in property values, with the national median now sitting at $797,944, down by -1.0% compared to last year.“This has kept the stock of available listings high, giving buyers the upper hand in price negotiations. However, with employment remaining resilient, few vendors are under pressure to sell,” he said.

Affordability drives regional performance

Regional New Zealand areas marked by affordability – where median values sit below $700,000 and often under $600,000 – stood among the strongest performers for standalone houses.

Median values rose by 2.0% or more since June in areas including Pukenui (5.1%) and Waimamaku (2.9%) in Northland, Makarewa (2.7%) and Kennington (2.5%) in Southland, as well as Blackball (2.3%) on the West Coast and St Arnaud (2.1%) in Tasman.

A similar trend was seen for townhouses with values rising by more than 2.0% quarterly in areas like Paeroa (4.9%) in Hauraki, Castlecliff (4.5%) in Whanganui, and Koutu (4.4%) in Rotorua.

“Across these provincial pockets as well as broader regions like Canterbury, Otago, and Southland, local economies are showing a degree of resilience,” said Mr Davidson.“Key regional drivers like farming and tourism continue to support buyer confidence in these budget-friendly markets.”

‍Sluggish demand weighs on main centres

Mr Davidson noted Auckland and Wellington suburbs generally showed weaker performance over the past 12 months, with a combination of rising property supply and a sluggish labour market holding back growth.

Across property types, townhouse values have dropped more appreciably in the past year in areas such as Beachlands (-11.2%), Māngere (-9.9%), Wiri (-9.8%), Kingsland (9.1%) in Auckland, along with Kelburn (-10.7%) in Wellington.“In general, our data is not showing that townhouse values are dramatically underperforming their standalone counterparts. But some particular terraced properties in these specific suburbs may be lagging due to characteristics such as unpopular floor/storey layouts or a lack of parking. Anecdotally, sales incentives are becoming more popular too, or unsold stock is sometimes being put out to rent.”

Despite broader downward pressures, however, Auckland continues to lead the high-end market. Herne Bay remains New Zealand's most expensive location for houses at a median of $3.03m, with Stonefields recording the highest townhouse median at $1.30m.

Subdued conditions expected to persist

Looking ahead, Mr Davidson expects macroeconomic headwinds to weigh on sales and values in the near term.

“With elevated economic uncertainty, higher mortgage rates, and a labour market recovery delayed until 2027, activity could stay subdued for at least another six months. However, improved affordability should help limit further downside risk.”