Southland’s districts hit record median values in December and several provincial centres, such as New Plymouth and Queenstown, reported increases.
In contrast, Auckland and Wellington remained weak, with declines from peak values exceeding 20% in most sub-markets.
Cotality said it was “cautiously optimistic” about 2026.
The report forecasts a potential 5% rise in property values this year, supported by lower mortgage rates and economic recovery.
However, regulatory changes and household mortgage decisions will be key factors to watch, especially in an election year, the firm said.
Property values across New Zealand slipped by 0.2% in December, after a modest 0.1% dip in November, according to Cotality NZ’s latest Home Value Index.
Despite early gains in 2025, values fell in seven of the past nine months, leaving the calendar year down by 1%.
House values fell by a bit less than that (0.7%), but townhouses were down by 1.8% and the much smaller apartment segment by 4.2%.
Across the main centres, Auckland remained sluggish in December, down by 0.6% compared to November, with Hamilton down by 0.7% and Wellington falling by 0.4%.
Christchurch recorded a 0.2% rise, while Tauranga and Dunedin both increased by 0.5%.
Cotality’s Kelvin Davidson says the property market could improve in 2026. Photo / Supplied
Cotality NZ chief property economist Kelvin Davidson said 2025 proved to be a “year of conflicting forces”, with many factors pulling in opposite directions to leave values broadly flat.
“December’s result – a minor fall – leaves the national median only slightly changed from 12 months ago as the upward momentum of lower rates was offset by an elevated level of listings on the market and the weak economy,” he said.
Davidson said the sluggishness of the labour market was the largest macro-economic headwind.
“Looking at the bigger picture, any lift in the unemployment rate would have an indirect effect on households’ confidence.”
He also pointed to growth in the stock of dwellings relative to population in recent years, which further moderated property values and helped affordability.
“The Government’s recent proposal to make major changes to resource management rules – if they get to legislation and stick through the political cycle – will only tend to reinforce these encouraging supply shifts in the housing market.”
Auckland remained a key weak spot across the property market, with only North Shore avoiding a fall in December.
“It’s clear that sentiment around Auckland’s housing market remains cautious, with buyers in the ascendency.
“Bullishness on the selling side of the equation certainly still appears absent,” Davidson said.
“That’s partly to do with the elevated stock of existing listings on the market, but also the continued supply shift coming through from the townhouse development pipeline.”
Looking ahead, Davidson said: “After the big downturn in property values over 2022-23, it’s been a stagnant couple of years over 2024 and 2025.
“That will have been disappointing for some, but it’s been a great opportunity for others, including recent strength from first home buyers.
“Debt-backed multiple property owners, including the cliched mum and dad investors, have also been working their way back into the market, helped by lower mortgage rates but also the full return of interest deductibility.”
Davidson said regulation, including loan-to-value ratios and likely debates around a capital gains tax, will also be a key area to watch in this election year.
“Households will also have some delicate decisions to make with their mortgages, especially in light of some recent increases to longer-term fixed rates.
“All in all, 2026 may well be a stronger year for the housing market than 2025 – despite the headwinds.”
He said 2026 would be a year of rebuilding confidence but the chances of repeating a 30-35% price spike as in the post-Covid era “seems pretty unlikely”.
“We have seen a rise in the housing stock relative to the population, and that’s really helped housing affordability by keeping a lid on prices,” he told the Herald.
“It’s been a good couple of years for first home buyers.”
The Reserve Bank cut its Official Cash Rate by a quarter of a point to 2.25% in November.
At the time, the bank’s monetary policy committee said house price growth was expected to be moderate, broadly in line with growth in nominal incomes.
Jamie Gray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.
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