The housing market is not its usual self at the moment and several indicators suggest it is a bit under the weather as it comes down from its summer highs.
The first area of concern is prices.
Take a look at the graph below which tracks the REINZ's median selling price from month to month.
It shows that after the precipitous increase in prices that occurred between May 2020 and November 2021, and the sharp correction which followed until August 2022, prices have gone, well, more or less nowhere.
Sure there's been monthly movements up and down, but the overall direction has been flat.
Prices have gone nowhere for the last two and half years.
Normally, stable property prices might be regarded as a good thing, but what makes the latest trend unusual is that prices have remained flat while mortgage interest rates have been falling.
Between November 2023 and March 2025, the average of the two year fixed rates charged by the main banks declined from 7.04% to 5.08%.
Normally that would result in an enthusiastic increase in prices, but over the same period the REINZ's median selling price declined slightly from $795,000 to $790,000.
Prices have remained as flat as a pancake, even as the cost of servicing a mortgage has declined.
That is a fundamental change to the usual patterns we would expect to see in the property market.
Another sign that things are not quite right is the build up of stock that's occurring.
The second graph below shows the total number of residential properties for sale on Realestate.co.nz at the end of each month from March 2021 to March 2025.
Over that period it has increased from 19,437 to 36,870, a 90% increase.
That would be okay if sales had kept pace, but they haven't.
In fact sales declined over that period, from 10,151 in March 2021 to 7640 in March 2025, a drop of 25%.
That in turn has led to a huge increase in the overhang of unsold properties still on the market at the end of each month, which has ballooned from 5678 in March 2021 to 28,072 in March 2025, an almost 500% increase - see the third graph below for the monthly trends.
And that has been occurring even though there has been a sharp jump in the number of unsold properties being withdrawn form the market each month.
Interest.co.nz estimates that 3231 residential properties were withdrawn from the market in March this year and that over the 12 months to March 36,106 properties were withdrawn, up 31.5% compared to the previous 12 months.
That's a lot of dissatisfied vendors out there, and their reasons for selling probably haven't changed much and may have become more urgent.
That represents a latent supply of additional stock waiting in the wings to come back onto the market.
All of this is occurring as the market bids farewell to the buoyant days of summer and needs to be at its most resilient to weather the coming winter gloom.
Add to that the general economic uncertainties which seem to multiply by the day, and the best that could be said for the housing market over the next few months is that its heading into uncharted waters.
Median price - REINZ
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21 Comments
The greed is strong in vendors. I want my...I want my capital gains.
Vendors still waking up that the market cannot meet that. Perhaps interest rate debasement will bring buyers back on board for ponzi math.
The HMNZS Manawanui sank charting uncharted waters.
Just checking but does someone know how to turn the autopilot off for the NZ Housing Market?
Perhaps interest rate debasement will bring buyers back on board for ponzi math.
Debasement is constant and is the result of manipulating the price of money / cost of debt servicing.
This is not just semantics and pedantry. We do ourselves a service to be accurate. Wind back the clock and many people were referring to QE as money printing. While their concern was warranted, technically they weren't correct.
Careful now folks. If you insist on debating day after day what gradient prices will fall, you'll risk being labelled a downbeat loser that wishes for falls and makes no progress in life.
Personally, as price falls continue to ensue and we discuss it day after day, I prefer the positive view that there are winners in this who are patiently and steadily making progress financially. I sincerely wish them all the very best on their pathway to secure home ownership.
Any Spruiker will tell you, they do not lose until they sell, so all is good, prices can fall, FHBers can join the Ponzi and when prices rise again everybody wins... just like the fairy tale. It almost sounds too good to be true (See China below).
I'm unclear as to why our ruling elite is not doing similar to that of their counterparts in Aussie to revitalize the Ponzi. Mind you, the Aussie Ponzi is going gangbusters - the gift that keeps on giving. And there are absolutely zero dark clouds on the horizon - the banks are stable, the sheeple are servicing their debt, jobs are plentiful. Also, they have an election around the corner and shiny trinkets are being thrown around like confetti at a wedding.
During Japan's epic bubble, all the business schools across the Anglosphere would study about how the Japanese were superior in running an economy and private sector business. Shouldn't the world be looking at Aussie and how their credit-driven housing market is the solution for resilience and prosperity?
Its working well for China...
Give it time Big J. Aus are around 2-3 years behind NZ in their trajectory, notwithstanding they have mineral wealth to maintain the velocity of money as a buffer to the way down. It will be an interesting couple of years over there.
if gold goes up enough they just nationalize the gold miners
So the median price is now back to where it was in Feb. '21, just over 4 years ago. Clearly that is uncomfortable to recent buyers who may now need to sell, but it offers a glimmer of hope to our young people that the property market may be on its way to becoming rational again.
For that to happen, prices need to remain flat for many years to come. The median price to income needs to get back to at most 5 and preferably less. This, coupled with a CGT would drive out most investors and leave the market for homeowners and those investors who own property for its income stream, not untaxed profits. I hope to see more of the rental market in the hands of big players, not individuals.
This is really the crux of the issue and was widespread for the historical income tax offset
investors who own property for its income stream, not untaxed profits
OMG you mean the asset has to reprice to provide a return on non cap gain income only...
That may take some movement....
Pretty much. Same speculation is happening in the US stockmarket, but price discovery is near instance. Price discovery in NZ property is dragging as seen on the bloat in listings with no sales, and sales withdrawn stats.
I hope to see more of the rental market in the hands of big players, not individuals.
Really? You’d prefer big hungry corporations?
You could actually draw a pretty good trend line from the start 2017-2019 (pre-covid) and if you extrapolated that it would just now start to intersect the index level we are at. So take out the covid bubble and you have a steady growth path to here. So apart from a few unfortunate people who bought in the surge, housing growth is back to a normal trend.
I agree prices have returned to where a normal growth path might have taken them. But I’m not seeing where “growth is back to normal trend” fits in the picture. Prices have been flat for years and remain flat.
There’s no sign the growth part has returned yet.
Perfect representation of the housing market in the picture.. people hanging onto those ridiculous prices, may go down with it..
Edit. Oops was meant to reply to DonKerr comment.
I thought price growth pre-covid was a bit silly too. It felt like a boom that went hyper post cobud not reasonably stable trajectory that boomed post covid.
This graph struck me at the a decade ago. I should probably go find an updated version.
https://communityhousing.org.nz/nz-outpacing-developed-world-in-house-p…
Geez and that's up until 2016 - terrifying.
Auckland hit a wall pre covid, with the massive prices mainly being developers wanting to add townhouses, so every property was worth that money... now no devs buying townhouses unsold and people still pointing at past sales of 4k per sq m in suburbs like Gelndowie... Now those going through are more 2.3k per sq m. those with sea views are stuck asking so much most people not even viewing. How many people have 3-4mil here for a home thats not that spectacular,,, but has a sea view.
But who will blink first
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