Full Breakdown
New Zealand Housing Market Faces Continued Decline
12/16/2025, 11:02:52 AM
Current Market Trends and Sales Volumes
The New Zealand housing market is experiencing significant challenges, with house values down 31.3% since their peak in 2021. Economists from ANZ have noted that sales volumes have fallen below the long-term historical average for this time of year, indicating a lack of expected recovery during the spring season. In November, residential sales dropped to 7,268, a decline of 4.4% from October and 5.7% from the same month last year, according to the Real Estate Institute of New Zealand (REINZ). The Auckland region was particularly affected, with sales down 5.5% from October and 6.6% year-on-year.
Regional Variations in House Prices
The national housing market presents a mixed picture. In Auckland, home values are reported to be 19.7% below their 2022 peak, while Wellington's values have decreased by 27.3%. Conversely, regions such as Canterbury, Otago, and Southland have seen modest gains of approximately 2% to 4% over the past year. The REINZ House Price Index (HPI) showed a slight increase of 0.1% in November compared to October, but a decrease of 0.2% compared to the previous year. Notably, the HPI declined in several regions, including Northland and Waikato, while it increased in Auckland and Wellington.
Factors Contributing to Market Weakness
Several factors are contributing to the current state of the housing market. ANZ economists highlighted a sharp increase in wholesale interest rates since the Reserve Bank's November Monetary Policy Statement, which poses downside risks to house prices. Additionally, the number of properties available for sale has reached its highest level in a decade, coinciding with a slowdown in population growth. This oversupply of homes, coupled with a decline in consumer confidence, particularly in property-related services in Auckland, has exacerbated the market's sluggishness.
Criticism and Concerns
Critics have expressed concerns about the long-term implications of the current housing market downturn. Satish Ranchhod, a senior economist at Westpac Bank, described the market as having hit an "air pocket," with both sales and prices declining. The unusual November slump, which marked only the sixth time in 33 years that sales fell below October levels, has raised alarms about the market's trajectory heading into 2025.
Official Statements
REINZ Chief Executive Lizzy Ryley remarked on the unusual nature of the November sales decline, emphasizing that it is atypical for activity to ease during this seasonal period. The mixed results across different regions highlight the complexity of the current housing landscape in New Zealand.
Verbatim Quotes
- “Renewed weakness in the housing market and the sharp increase in wholesale interest rates since the November Monetary Policy Statement [from the Reserve Bank] presents some downside risk to house prices,” — ANZ Economists
- “This November marked only the sixth time in 33 years that New Zealand's November's sales count was below October's, underscoring how unusual it is for activity to ease at this point in the seasonal cycle,” — Lizzy Ryley, REINZ Chief Executive
The New Zealand housing market is navigating a period of uncertainty, with various factors influencing both sales and prices as the year progresses.
