New Zealand’s house price collapse broadens


Yesterday, the Real Estate Institute of New Zealand (REINZ) released its House Price Index (HPI) for June, which posted a 1.9% decline at the national level:

New Zealand house price index

New Zealand house prices falling fast.

House prices nationally were also down by 5.4% over the June quarter, with every single major urban district posting quarterly falls:

House price falls by major district

Across the board house price falls.


The REINZ HPI is considered the most comprehensive and timely gauge of house prices in New Zealand because it is compiled from sales made by REINZ members as they become unconditional. Unlike median prices, the HPI also adjusts for movements in the composition of sales each month by analysing attributes such as land area, floor area, number of bedrooms etc.

For this reason, the REINZ HPI is used by the Reserve Bank of New Zealand’s (RBNZ) forecasting and macro financial teams.

Commenting on the result, Chief Executive at REINZ Jen Baird noted that “housing affordability remains an issue for many buyers on the market”, which “paired with tighter lending restrictions, higher interest rates and concerns over inflation” is driving “hesitancy amongst buyers”.


This negative sentiment won’t be helped by yesterday’s 0.5% rate hike by the RBNZ – the third double rate hike in a row.

The RBNZ flagged further aggressive rate hikes as it remains “resolute in its commitment to ensure consumer price inflation returns to within the 1 to 3 percent target range”. The RBNZ also stated that it “remains broadly comfortable” with its recent ‘forward track’ guidance of a 3.9% official cash rate by September 2023.

In short, the RBNZ will continue to aggressively hike interest rates to bring inflation under control. And this means that New Zealand house prices will continue to plunge.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.