ANALYSIS: Nationwide house prices are down by 1.2% annually, but some parts of the country are bucking the national trend. So where are house prices bubbling away, and where are prices completely off the boil?
It’s less of a tale of two cities and more of a tale of two islands. Over the last year, property prices rose in almost 75% of council areas in South Island. It’s a completely different story in the North Island, where house prices fell in 65% of council areas.
In fact, the five biggest rises were in the South Island, while four of the five steepest falls were in the North Island.
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In Buller on the West Coast, house prices jumped by more than 10% annually. Invercargill, the country’s most southern city, saw house prices jump 4%. These areas are clearly outperforming the national average.
No such luck for homeowners in Whangarei. Property prices there dropped by 4%, as did most of the lower North Island. Property values in Porirua City, for instance, dropped by more than 5.5%.
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But while house prices in the South Island are outperforming the rest of the country, they aren’t, with a few exceptions, skyrocketing in value. They’re up by 4-6%, which suggests house prices are quietly bubbling away in the South Island rather than on a rapid boil.
But is the South Island’s housing market doing better than the North Island’s? On the whole, properties in the South Island are more affordable and didn’t rise as steeply as North Island prices during the post-Covid boom. While Auckland’s median price still sits well above $1 million, you can pick up a house for under $500,000 in most parts of the South Island.
Lower prices mean buyers don’t require as big a deposit, and the mortgage repayments aren’t as steep.
Opes Partners economist Ed McKnight: "Properties in the South Island are more affordable and didn’t rise as steeply as North Island prices during the post-Covid boom." Photo / Fiona Goodall
But there is an important caveat: some of the big risers and fallers are small housing markets. Ōtorohanga, where house prices dropped by more than 15% over the last 12 months, has less than 1% of Auckland’s population and is unlikely to see much house-buying activity. These smaller areas are also vulnerable to large swings in house prices. One high-end rural block that sells well above its CV can pull the whole index up. Equally, a low sale can also pull the total down. So, while the headline number matters, context matters more.
I wouldn’t call the current crop of value increases a South Island boom by any means, and these numbers will likely look different come 2026.
The figures also show that New Zealand doesn’t move as a single housing market. New Zealand house prices dropped by 1.2%. But that’s not everyone’s experience. Some parts of the country are up 6%. Others are down 6%
If you’re a homeowner, this data can help you understand how your area is really performing.
- Ed McKnight is the economist at property investment company Opes Partners
