Regional property market trends diverge

New Zealand’s housing market has entered a new phase marked by regional disparities, according to Cotality Chief Property Economist Kelvin Davidson.

Mr Davidson noted that while national indicators pointed to stabilising property values, the picture beneath the surface was far more fragmented. 

“Following the dramatic growth in property values during the COVID-era boom, New Zealand’s housing market has entered a more fragmented phase,” he said. “Some regional markets have already surged past previous highs, while others remain well below their cyclical peaks.”

Cotality’s latest data showed that New Plymouth, Westland and Kaikōura all hit record highs for property values in April. However, 13 areas – including parts of Auckland and Wellington, as well as Wairoa – were still more than 20% below their previous market peaks.

Affordability driving regional divergence

Mr Davidson attributed much of the regional variation to affordability trends and structural factors. “Affordability remains a key pillar of housing demand, and in many South Island regions we’re seeing that balance become a little more favourable for buyers,” he said.

A clear north–south divide has emerged. While mortgage rates have eased and early signs of renewed growth are appearing across the country, the South Island has performed more strongly in both value and affordability.

Meanwhile, some of New Zealand’s largest urban centres continue to face headwinds. In Auckland, a substantial pipeline of new townhouse developments is adding supply, while fiscal tightening in Wellington is dampening demand. These structural challenges may delay a full recovery in those markets, even as broader economic indicators begin to improve.

Outlook for 2025 cautiously optimistic

Despite current regional imbalances, Mr Davidson said that improved mortgage affordability and a gradually recovering economy would support renewed value growth across much of the country in 2025 – including in the underperforming Auckland and Wellington markets.

With the market shifting and affordability improving in some areas, it’s a good time to reassess your options. If you’d like help buying a property, I’d be happy to guide you through the process – just get in touch.