New Zealand’s housing market collapses


The Real Estate Institute of New Zealand (REINZ) has released its September House Price Index (HPI), which adjusts for differences in the mix of properties sold each month.

According to the HPI, values nationally fell another 0.7% over September to be down 3.3% over the quarter and by 8.1% year-on-year:

New Zealand house prices

Big haircut in New Zealand house prices.

As illustrated in the next table, house prices fell across 23 out of 26 sub-markets over the September quarter:

New Zealand house prices by region

23 out of 26 regions experienced house price declines in Q3.

New Zealand house prices have now plunged 12.6% from their November 2021 peak at the nationally level, with Auckland down 17.3% from peak and Wellington down 19.8%.

Seasonally adjusted sales volumes were also down 12.9% year-on-year in September, according to the REINZ.


Commenting on the results, REINZ CEO Jen Baird noted:

“Overall, buyers remained cautious in September. Increasing interest rates, tighter lending criteria, and concerns around the cost of living continue to challenge the pace of the market. In light of last week’s OCR increase of 50 basis points, bringing it to 3.5%, with further increases expected, we expect sentiment to remain cautious — despite a strong labour market”.

The Reserve Bank of New Zealand (RBNZ) last week lifted the official cash rate another 0.5% – the fifth straight ‘double’ hike. The RBNZ also indicated that more aggressive rate hikes are incoming:

Committee members agreed that monetary conditions needed to continue to tighten until they are confident there is sufficient restraint on spending to bring inflation back within its 1-3 percent per annum target range. The Committee remains resolute in achieving the Monetary Policy Remit.


Therefore, New Zealand house prices should continue falling.

After experiencing one of the world’s greatest house price booms over the pandemic, New Zealand housing is now experiencing one of the largest busts.

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.