The Cotality Home Value Index (HVI) for the final month of 2025 showed another gentle decline, this time by -0.2% at the national level. With the calendar year now finished, we’ve recorded a modest fall in values of -1.0% over the past 12 months; yes, technically a drop, but pretty close to flat.
As such, our prediction from late 2024 that 2025 could prove to be ‘the year of conflicting forces’ with values largely stable has turned into reality. What were the details of the latest HVI release and what might lie ahead in 2026?
Values remained patchy across the country in December
Taking a look at the main centres in December:
- Hamilton was down by -0.7%
- Auckland fell by another -0.6%
- Wider Wellington by -0.4%
- Christchurch edged up by 0.2%
- Tauranga and Dunedin both rising by 0.5%.
Generally speaking, the provincial markets remained a little more resilient. The Southland Region in particular remains buoyant, with property values consistently reaching new record highs each month, while Queenstown and parts of Canterbury are other pockets of strength too. Hawke’s Bay, however, remains a bit softer.
If you would like a full breakdown of the Home Value Index in your region or city, click HERE
What were those conflicting forces in 2025?
There’s always going to be regional variability, so it’s probably not worth trying to read too much into those divergences (although clearly the strength of the farming sector will be buoying Southland’s property values to some extent). Indeed, the bigger picture is that property values largely treaded water in 2025.
Why did this happen? On one hand, mortgage rates fell and this put more money into households’ pockets, no doubt supporting property values to some degree. But at the same time, the stock of listings on the market remained elevated, and the economy continued to struggle for much of 2025, with the unemployment rate rising. These factors offset the upwards influence on house prices of lower mortgage rates and meant a generally flat year.
It’s also worth noting that the physical stock of dwellings in NZ has risen relative to our overall population in recent years, which is an added restraint on property values.
2026 should see a bit more growth in sales and prices
Looking to the year ahead, it seems unlikely we’ll see a sudden switch from a buyer’s market to conditions being firmly in favour of sellers, but with housing affordability now much more ‘normal’ and the economy showing a re-emergence of growth, it wouldn’t be a surprise to see property values edge higher in 2026.
Added to that, even though mortgage rates have probably stopped falling, it may be a little while until we see more widespread increases again (notwithstanding the rises in some longer term fixed rates before Christmas). And as sales volumes lift, the stock of available property listings should tighten to some degree. My view: roughly 5% growth in national median values in 2026.
There’ll be plenty else to watch too, including the election, impact of DTIs, and when/whether more people start to take longer term fixed rates again.
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!
