Cotality’s latest dwelling value results for New Zealand revealed that home values fell by 1.6% in the year to May to be 16.3% lower than their peak.
Source: Cotality NZ
As illustrated in the following chart from Cotality, home values have fallen heavily across all major markets.
Source: Cotality
Separate data from the Real Estate Institute of New Zealand (REINZ), presented below by Justin Fabo from Antipodean Macro, shows that real home prices have fallen back to late 2019 levels.
The decline in home values in New Zealand has been an unambiguous boon for first home buyers, who are enjoying the best affordability in years.
The 2022 Demographia Housing Affordability Survey ranked New Zealand as having one of the world’s most expensive housing markets, with a median multiple of 11.2 in 2021.
Source: 2022 Demographia Housing Affordability Survey
However, the steep decline in home prices reduced New Zealand’s median multiple to 7.7 in 2024.
Source: 2025 Demographia Housing Affordability Survey
The 2.25% reduction in the official cash rate has lowered new mortgage rates significantly, as illustrated below by Cotality:
The combination of lower home prices and falling interest rates has reduced the level of mortgage repayments as a percentage of household income to around 35% from 50%.
Not surprisingly, first home buyers have become more active in the market. Cotality reported that first home buyers accounted for 26.7% of the market in May, a cyclical high.
Auckland has seen an especially large rise in first home buyers:
New Zealand renters are also experiencing improving conditions following the sharp decline in net overseas migration, which has hit a 2½ year low.
As a result, rental growth has faded away, improving affordability for tenants.
The upshot is that New Zealand’s housing market has become more affordable to buy or rent, which is an unambiguously positive outcome for young Kiwis.
