The Cotality hedonic Home Value Index showed that national median values edged up by 0.1% in September. Now, in reality, that’s a small rise and you could essentially still just call it flat.
But even so, after five consecutive falls over April to August (totalling 1.6%), the latest figure still marks a subtle change of direction. It’s early days, but a small lift in property values would be consistent with lower mortgage rates now finally passing through more fully to borrowers.
Patchiness Across The Main Centres, More Resilience In The Provinces
It was a mixed bag in September across the main centres:
- Wellington values fell by another 0.4%
- Auckland dipped 0.2% (driven by declines in Manakau, Auckland City, and North Shore)
- Hamilton held steady
- Dunedin, Christchurch and Tauranga all recorded increases
Outside the main centres, there’s a more obvious degree of resilience. Indeed, apart from a drop in values in Rotorua and a small dip in Whangarei, many other provincial towns and cities rose in September, including:
- New Plymouth (0.7%)
- Invercargill (0.8%)
- Gisborne (2.5%).
If you would like a full breakdown of the Home Value Index in your region or city, click HERE
The Two-Speed Economy And Buying Opportunities
At face value, there’s now a growing body of evidence that the two-speed economy – with provincial areas outperforming on the back of strong agricultural returns – might be starting to filter into the property market too. We probably shouldn’t get carried away with these flow-on effects, given there’s still a significant degree of uncertainty across the wider economy. But even so, confidence may well be slowly returning to the property market in our smaller cities and rural towns.
It’s also important to acknowledge that while a weak property market might be disappointing for some owners and vendors, it presents attractive opportunities for buyers. We’re seeing strong activity from:
- First home buyers, often using KiwiSaver for at least part of their deposit
- “Mum and Dad” investors
Those investors will have benefitted from mortgage interest deductibility being fully reinstated from 1st April this year. But the falls in mortgage rates themselves, which have reduced the cashflow top-ups out of other income that are generally required on an investment purchase, may well have been the most significant factor.
Some Perspective And A Look Ahead To 2026
Clearly, even though values didn’t fall in September, they’re not racing away either. This reflects continued restraints such as the weak economy/labour market, and also just a sense of caution that pervades the housing sector at present.
But affordability is improving, about 45% of existing borrowers (either floating or on a short-term fixed rate) will see their mortgage payments fall within the next six months, the stock of listings on the market has eased downwards, and the unemployment rate should be falling next year.
As such, although 2025 could remain pretty challenging, there are forces building for a rise in property values in 2026. However, it could still be modest (5% or less), reflecting the rise in physical property supply relative to population in recent years, as well as the lurking influence of DTIs.
At The Mortgage Supply Co, we’re here to guide you every step of the way, whether you buying, selling, or refinancing. Reach out to our team today to discuss your unique situation and how we can support you in navigating the ever-changing property market!
