Supply tsunami craters New Zealand house prices


The September Trade Me Property Price Index showed that the number of homes listed for sale across New Zealand soared by 67% in September, which saw “more properties for sale than in any other September on record”.

At the same time, buyer demand remained soft with nationwide listing views falling by 1% in September.

Earlier this week, Statistics New Zealand showed that the nation experienced a net overseas migration (NOM) loss of 11,500 in the year to June 2022, which drove population growth to its lowest level since World War II.

This sharp decline in population growth on the back of negative immigration has seen the supply of new housing in New Zealand exceed population-drive demand by 60,000 homes over the past two years, according to

Advertisement estimates the population increase of 12,700 in the 12 months to June this year would have created demand for an additional 4885 new homes, based on average household occupancy in the 2018 census. But it’s likely around 37,614 new homes were completed during that period, giving a surplus of supply over demand of 32,729 homes.

That comes on top of an estimated surplus of 26,650 homes in the 12 months to June last year, giving a total surplus of 59,379 homes over the last two years.

That is a substantial turnaround from previous years when demand for housing was significantly exceeding supply, creating a growing housing shortage. has previously estimated that high levels of immigration in the year to June 2020 meant the demand for new homes exceeded supply by almost 10,000 homes that year.

NZ housing supply

So basically, buyer demand has collapsed on the back of rising mortgage rates at the same time as the number of homes for sale has swelled. At the same time, more homes are being constructed than needed for New Zealand’s growing population.

While aggressive interest rate hikes from the Reserve Bank is the primary reason why New Zealand house prices have fallen 12.6% from their November 2021 peak, the rising supply-demand imbalance is adding further headwinds for the property market.

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.