New Zealand property values finished 2025 slightly lower, but the latest Home Value Index suggests the market may be approaching a turning point. While prices edged down in December, several underlying indicators are beginning to tilt in a more positive direction heading into 2026.

The overall picture is not one of renewed decline, but of a market stabilising after a long correction.

A Small Dip to Close the Year

Property values across Aotearoa New Zealand slipped by 0.2% in December, following a modest 0.1% decline in November. Over the full calendar year, values were down by 1.0%.

Houses fell slightly more than the national average, while townhouses recorded a smaller decline. Apartments, however, saw a more noticeable drop, reflecting softer demand in higher-density segments.

Main Centres Still Mixed

Performance across the main centres remained uneven:

• Auckland slipped again in December, continuing a sluggish trend.
• Hamilton and Wellington also recorded modest monthly declines.
• Christchurch edged higher, reinforcing its relative resilience.
• Tauranga and Dunedin both posted solid monthly gains.

This variation highlights how local affordability and supply dynamics are increasingly shaping outcomes.

Why 2026 Could Look Different

Despite the soft finish to 2025, several factors point toward a potential improvement in early 2026:

• Mortgage rates have moved lower from their peaks
• Net migration remains elevated, supporting housing demand
• Affordability has improved following price corrections
• Listings are starting to ease as sales pick up

At the same time, labour market softness remains a headwind, weighing on household confidence. This tension between improving financial conditions and cautious sentiment is keeping price movements subdued for now.

From Correction to Consolidation

With national values still well below their early-2022 peak, the past year has been more about consolidation than recovery. The market appears to be moving sideways rather than falling further, suggesting a floor may be forming.

Any recovery in 2026 is likely to be gradual rather than dramatic, driven by affordability improvements and lower borrowing costs rather than speculative demand.

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The big takeaway

While New Zealand property values ended 2025 slightly in the red, the direction of travel is becoming more encouraging. Stabilising prices, falling mortgage rates, and easing supply pressures suggest early 2026 could mark the beginning of a slow, region-led recovery.

For buyers, conditions remain measured. For sellers, realistic pricing is still essential. And for the market overall, the worst of the correction appears to be behind us.

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Source: Cotality – NZ Home Value Index, January 2026