The Cotality Home Value Index (HVI) for the second month of the year was up by 0.2% at the national level – still a modest increase, but nevertheless the strongest in four months, and more than reversing the minor -0.1% fall in January. The national median value now stands at $806,697, still down by -17.3% from the peak in early 2022 – which was $975,540.
So what should we take from this? How did February’s value patterns look beneath the surface and has the upturn begun?
Last month’s resilience was broad-based …
It was quite striking in February’s results that all of the main centres saw property values lift and some by significant amounts. Auckland remained a little softer (although still ticked up by 0.1%), but Wellington, Tauranga, and Christchurch all increased in the range of 0.4%-0.6%, with Hamilton and Dunedin stronger still at 0.9%.
There were also pretty consistent results outside the main centres too, with notable lifts in values in Gisborne (0.9%), Invercargill (1.1%), and Whanganui (1.2%). Even the softer areas still weren’t all that weak, with Rotorua and New Plymouth edging down by only -0.1%, and Palmerston North flat. Alongside Ashburton, Timaru, Gore, and Southland District, Invercargill is the other part of the country where property values are at a new peak.
If you would like a full breakdown of the Home Value Index in your region or city, click HERE
… and that fits with the fundamentals
In trying to explain some of these patterns, it certainly wouldn’t be a surprise to see a more sustained re-emergence of modest gains in property values this year. After all, sales activity has been trending upwards for some time now, mortgage rates are down, and the economy is showing clearer signs of a pick-up too. The labour market probably holds the key, and most forecasts suggest that employment has already troughed, with the unemployment rate set to fall from now on.
But let’s not get carried away
That being said, it remains early days, and a modest lift in national property values in a single month in February is nothing to go overboard about. Indeed, given the cautious attitude that still seems to prevail amongst both buyers and sellers, you’d probably need to see at least two to three more monthly increases before calling it a trend.
Moreover, even if that upswing does begin in earnest this year, values are still down more than 17% from their peak. It’s been a long soft patch for values and it’ll take some time to turn around.
A cautious outlook for 2026
In summing up, there are solid reasons to think sales (and mortgage lending) volumes should continue to rise this year, with property values increasingly slowly too. These include lower mortgage rates and a strengthening economy. But let’s not overlook the risks/uncertainty too, such as Middle East conflict, the General Election, and potential effects of debt to income ratio caps.
In the current environment, it’s no surprise to see a rising share of borrowers starting to lock in longer term fixed mortgage rates. There’s now 30% of existing loans fixed and not due to reprice for at least a year, the highest share since February 2024.
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!
