From boom to equilibrium: New Zealand's housing market in three phases

New Zealand's housing market is continuing its equilibrium, having evolved through three distinct phases since the pandemic peak.

Peak pandemic activity saw speculative demand drive prices to unsustainable levels. Post-pandemic correction followed as sales collapsed 41 per cent, listings fell 20 per cent, and prices dropped 19 per cent from their peaks, unwinding the speculative excess. The beginning of 2023 marked the start of the recovery phase as prices stabilised followed shortly after by increases in both sales and listings

The August 2025 median house price of $761,000 sits well within the $750,000 to $800,000 range that we've observed for the last two and a half years. Listings returned to pandemic peak levels early in 2025 and have plateaued since, with the 12-month rolling count sitting at 110,000. Meanwhile, sales experienced their first flat month since the 2023 recovery began. Sales peaked at 78,000 between July 2024 and 2025 - up 34 per cent from the post-pandemic correction bottom. Between August 2024 and 2025, sales again recorded 78,000, the first time in 29 months that sales failed to increase. This plateau comes despite the Reserve Bank of New Zealand lowering its Official Cash Rate by 25 basis points to 3 per cent at its August 2025 meeting.

With all three indicators now returned to and maintaining healthy levels, the question is how long this will continue. The New Zealand property market appears to sit in a rare period of equilibrium, with low interest rates that favor buyers in the lower end of the market. Whereas during the pandemic we saw significant speculative demand from investment buyers, the market is now characterised by people buying houses for their intrinsic value rather than their potential as assets.

This becomes more clear when viewed with a regional lens. Major cities and upper-end markets such as Auckland and Wellington are performing worse, with negative one-year and three-year growth as demand spreads to more affordable regions.

Among major cities, Christchurch stands out as having the cheapest house prices and the only city with positive growth compared to one year ago and three years ago. Although Tauranga is showing greater one year growth, it also has the greatest three year decrease indicating its current growth is catch-up recovery rather than sustained momentum.

Similarly, among regions, only five out of 16 are showing both positive one year and three year house price growth and all regions (Gisborne, Southland, West Coast, Nelson, and Canterbury) have median house prices below the national median. The most expensive regions (Auckland, Bay of Plenty, Waikato, and Wellington) show the largest long term decrease in prices with no signs of sustained increase.