New Zealand Housing Market Continues Downward Trend

Highlights:

• Steady Decline: New Zealand's housing market has fallen for nine out of the past ten months, with December values dipping 0.2%, bringing the national median house price to $803,624—a 3.9% annual decrease.
• Key Factors: CoreLogic NZ attributes the decline to tightened lending conditions, subdued buyer demand, and elevated interest rates, with a modest pace of decrease since February's peak.
• Market Outlook: While challenges persist, easing mortgage rate pressures in 2025 could stabilize the market, offering potential relief for buyers and homeowners.

The New Zealand housing market has experienced a steady decline, with values decreasing for nine of the past ten months, according to CoreLogic’s property index. At the time of writing, December saw a 0.2% dip in property values, bringing the national median house price to $803,624—a 3.9% drop compared to the previous year.

December Summary Reflects a Challenging Year

Kelvin Davidson, CoreLogic NZ’s Chief Property Economist, stated that the further decline in December aptly summarizes 2024’s housing market trends. Since peaking in February, property values have been gradually declining at a modest pace. Davidson noted that the initial declines were driven by tighter lending conditions and subdued buyer demand.

Market Outlook for 2025

Looking ahead, CoreLogic suggests the housing market may continue to face pressure. Davidson emphasized that interest rates and inflation will remain key factors influencing buyer behavior and market dynamics. However, the gradual easing of mortgage rate pressures could provide some relief in the medium term, potentially stabilizing values later in 2025.

This consistent decline signals a challenging period for both homeowners and investors. CoreLogic’s data highlights the importance of strategic planning in a fluctuating market, with affordability and demand playing pivotal roles in shaping the market’s trajectory.

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