The Cotality hedonic Home Value Index showed no change in November, with the median value now sitting at $806,551. That’s 17.4% below the early 2022 peak and only a modest 1.1% higher than June 2023’s trough. Compared to last November, values are actually still down by around 0.7%.
In other words, despite some signs that sentiment in the economy and property market has started to turn upwards, values themselves are proving slower to shift.
The regional picture for property values remains mixed
Of course, it’s worth noting that the sluggish overall trend for property values is not reflective of every region.
- Auckland dropped by another 0.2% in November, on top of falls in each of the previous seven months as well.
- In contrast, other main centres such as Hamilton, Tauranga, and Christchurch saw more meaningful increases in November.
- Several provincial markets also increased modestly in November, with Whangarei (0.5% monthly rise) and Invercargill at 0.8% standing out even more clearly.
Invercargill is particularly notable, as it is one of only four districts where property values actually reached a new peak in November – including Gore, Ashburton, and Kaikoura.
Taking a step back, the broad trend among many of the country’s regional markets has been for property value falls to become less widespread in recent months. That seems consistent with better results from the primary sector of our economy, including dairying, which will be creating a bit more cashflow in those areas and rising sentiment.
What’s ‘bad’ for some is great for others
Of course, even though some property owners and/or sellers will be disappointed that property values are generally taking a bit of time to respond to lower mortgage rates, there are always two side to the coin in the housing market – and for other groups, such as first home buyers and new investors, soft values are actually a good thing.
You might ask why values are ‘dragging the chain’ a bit? At this stage, there seem to be two prominent factors. First, the stock of listings on the market remains higher than the normal position for this time of year. That means pricing power largely remains in buyers’ hands, which naturally tends to cap any growth in values.
And second, the labour market is yet to emphatically turn the corner. Yes, the unemployment rate may well have peaked at 5.3%, but it may not fall more significantly for a while yet. To some extent, firms have ‘hoarded’ labour during the recession, so it’ll take a more sustained upturn in activity/profits before they need to start hiring again. The subdued labour market is a restraint on households’ confidence and their willingness to pay more for property.
What might lie ahead in 2026?
With housing affordability significantly improved, listings likely to ease downwards, the economy set to perk up, and lower mortgage rates progressively feeding through to households’ finances, a rise in property values of around 5% seems likely in 2026. That would be modest by past standards, but reflects new considerations, such as the DTI limits.
As always, there’ll also be a range of other factors to keep an eye on too – including market composition (first home buyers, investors etc), the potential for more bank switching, delicate decisions around fixing short or long, and of course the Election.
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!
