New Zealand house prices will take less than two years to return to their post-Covid peaks from current levels, new figures suggest.
According to market projections by OneRoof and its data partner Valocity, the nationwide average property value will return to its February 2022 high of $1.098 million in the third quarter of 2025.
Auckland and Wellington regions will have to wait a little longer, though. Both regions suffered larger declines than the rest of the country and have more to recover. The OneRoof-Valocity forecast pins Wellington’s return to peak value in the second quarter of 2026 and Auckland’s return to peak six months later.
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The average property value in West Coast and Otago has already exceeded previous peaks, and Southland and Canterbury are set to join them later this year. Gisborne, Marlborough, Taranaki and Waikato are all forecast to fully recover in the first quarter of 2025.
The OneRoof-Valocity projections are based on the average quarterly growth rate for each region in the five years to the end of 2019.
Wayne Shum, senior research analyst for Valocity, said higher for longer interest rates, a cost of living crisis and the impact of the planned debt-to-income ratios would lengthen the housing market's recovery time.
He expected the pace of value growth over the next two years to be much lower than that experienced in 2020 and 2021, when low interest rates and Covid restrictions fuelled a boom in prices.
“We ignored the growth rate between 2020 and 2023 due to extreme volatility in the market during that period – the nationwide average property value jumped 44% then subsequently fell 14%,” he said.
“The growth rate since values hit their trough last year suggests it is returning to pre-Covid patterns. And while past performance may not be a perfect indication of future performance, the Valocity forecast does give homeowners a rough guide for the next two years in the housing market,” he said.
Valocity senior research analyst Wayne Shum says the market is returning to its long-run growth pattern. Photo / Fiona Goodall
The latest house price figures from the OneRoof-Valocity House Value Index show the nationwide average property value was up just 1% ($10,000) in the three months to the end of February, as uncertainty around interest rates curbed buyer appetites.
Auckland property sales in January were the region’s lowest monthly tally since April 2020 when the country was in lockdown in response to the Covid-19 pandemic. February sales have been similarly challenged.
Quarterly value growth in the region slowed to 0.2%, down from 2.5% in the three months to the end of November.
The best performing region continues to be West Coast; its average property value was up 4.7% over the last three months to $444,000.
Wellington and Canterbury regions have also picked up pace, with quarterly growth in both regions above January and February levels, while Otago continues to benefit from strong interest in Queenstown-Lakes.
However, the market was sluggish for much of the rest of the country, with the average property value in Marlborough and Nelson dropping in the last three months.
The figures show Queenstown-Lakes is still the most popular location for buyers in the upper price bracket, with the local authority recording property value growth of 4% quarter-on-quarter.
Momentum also appears to be slowly building in Wellington City and Tauranga. The rate of value growth in Christchurch, on the other hand, has slowed from 3% in the three months to the end of September to 1.7% in the three months to the end of February. In Auckland, property value growth has stalled or dipped in the region’s former local authority districts.
The housing market's bumpy road to recovery can also be seen in the suburb value figures. In January 90% of all suburbs with 20-plus settled sales in the previous 12 months recorded quarterly value growth. In February, that dropped to 70%, with some suburbs recording quarterly drops of more than 4%.
In contrast, stock levels have rebounded, with new residential listings up nearly 30% year-on-year nationwide and nearly 47% in Auckland. Total residential listings on OneRoof for February were up 9.8% year-on-year, reflecting increased optimism among sellers. The flood of new homes on the market after a relatively long drought could put power back into the hands of buyers.
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