New Zealand house prices slump to three-year low amid buyer wariness

In August, New Zealand’s Home Value Index slipped another 0.4%, extending a downturn that began in early 2022 and setting a three-year low for house prices. Values are now 18% beneath the January 2022 peak, adding pressure to households already coping with higher fuel costs and rising unemployment. Cotality’s chief property economist Kelvin Davidson described the market as largely stagnant, with no immediate trigger for stronger growth, while the Reserve Bank of New Zealand raised its official cash rate to 2.75% and hinted at additional increases.

He linked buyer hesitation to economic uncertainty, higher mortgage rates, plentiful for-sale properties, and the looming November general election, which fuels tax-policy doubts. The central bank projects a further 0.5% price drop in 2026, followed by modest gains of 2.4% in 2027 and 5.2% in 2028, contingent on improvements in the labour market and job security.