Will property prices rise in Auckland?

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Are Auckland property prices rising now?

Auckland property prices are still falling today, so there is no convincing price recovery yet.

Cotality’s latest Home Value Index recorded another 0.5% decline across Auckland in August. That followed a 0.6% fall in July, which means the weakness has continued rather than disappeared as winter ended.

The decline is also broad. Auckland City fell 0.5% in the latest reading, North Shore and Rodney each dropped 0.6%, Manukau fell 0.4%, Waitakere lost 0.2% and Papakura slipped 0.1%. Franklin was the only major Auckland area to hold steady. Over the latest quarter, most Auckland sub-markets have fallen by roughly 1% to more than 2%.

Barfoot & Thompson gives us the main counterargument. Its Auckland median sale price reached NZ$955,000 in August, up 1.1% from July and 0.5% from a year earlier. The average sale price was NZ$1.098 million, 1.6% higher year-on-year.

We would give more weight to Cotality's valuation measure here. Barfoot completed only 787 sales during the month, down 11.5% from a year earlier, so a different mix of homes changing hands can move the median without comparable Auckland properties actually becoming more valuable.

For now, the market looks close to stabilising in places, but Auckland-wide property values are still slipping.

Auckland measure	Latest result	Comparison	What we see
Cotality Auckland values	-0.5%	Latest month	Prices still falling
Auckland City	-0.5%	Latest month	Weak
North Shore	-0.6%	Latest month	Weak
Rodney	-0.6%	Latest month	Weak
Barfoot median sale price	NZ$955,000	+0.5% YoY	Firmer transaction median
Barfoot sales	787	-11.5% YoY	Low buyer activity

How bad has the Auckland property crash actually been?

The Auckland property correction has already been severe: every major Auckland sub-market is currently at least 20% below its previous peak.

Cotality's latest figures show Auckland City, Manukau and Waitakere have suffered particularly large peak-to-current declines, with values in those markets around 25% or more below their highs. Even North Shore, which has held up somewhat better, remains close to 20% below peak.

That changes what we should worry about next. Auckland has already absorbed much of the valuation adjustment created by the pandemic housing boom and the sharp interest-rate shock that followed.

The correction also looks larger once inflation and income growth are taken into account. A house that remains 20% below its nominal peak after several years of rising wages is much cheaper relative to household earning power than the headline price decline suggests.

There is still plenty of pain underneath the averages. Cotality's latest Pain and Gain study found 20.9% of Auckland residential resales in the June quarter sold for less than their previous purchase price. That was the worst result among the main centres and was partly driven by weak apartment performance.

Across New Zealand, only 13.1% of resales made a loss. Auckland's rate was therefore about 60% higher than the national figure.

We think this already-large reset reduces the chance that Auckland still has another enormous decline ahead. It says much less about how quickly prices will recover.

Is Auckland property finally affordable again?

Yes. Auckland housing affordability has improved enough to provide a much stronger floor under prices than Auckland had during the boom.

Cotality's latest affordability work puts Auckland's mortgage-servicing burden at about 43% of median household income for a recent buyer with a 20% deposit. Auckland is now more affordable relative to its own history than it has been for years.

The national numbers show how large the adjustment has been. Cotality calculates that a representative new mortgage now consumes around 40% of median gross household income, down from roughly 56% around the worst of the affordability squeeze. The long-run average is about 42%.

Saving a 20% deposit has also fallen from a post-pandemic high of roughly 13.4 years of typical household savings to about 8.9 years. The national property-value-to-income ratio has returned to 6.7, exactly its average since Cotality's series began in 2004.

Auckland benefited more than several other large cities because prices fell so far. Christchurch, for example, currently requires about 40% of income to service a representative new mortgage despite having much cheaper houses, because Christchurch prices have held up better and local incomes are lower. Auckland is around 43%.

Auckland housing is still expensive in absolute dollars. Relative to local incomes and financing costs, though, it is much less stretched than it was.

We see improved affordability mainly as protection against another huge fall. Buyers still have enough choice to avoid bidding aggressively against one another, so affordability alone has yet to push Auckland prices higher.

Affordability measure	Current level	Historical comparison
Auckland mortgage servicing	~43% of household income	Better than Auckland's usual position
NZ mortgage servicing	~40%	Long-run average ~42%
NZ value-to-income ratio	6.7x	Equal to long-run average
Time to save 20% deposit	~8.9 years	Down from ~13.4 years
Auckland prices from peak	At least -20% across major areas	Major valuation reset

Are mortgage rates about to rescue Auckland property prices?

No. Cheaper mortgages already gave Auckland buyers substantial relief, and interest rates are currently moving the other way.

The Reserve Bank cut the Official Cash Rate from 5.50% in 2024 to 2.25%, which removed a huge amount of pressure from borrowers. That easing cycle played an important role in improving housing affordability.

The backdrop has changed quickly. The Reserve Bank first lifted the OCR to 2.50% and has now raised it again to 2.75%. Inflation reached 4.1%, with higher fuel costs linked to the Middle East conflict contributing to the jump.

Mortgage pricing has reacted. Reserve Bank figures show the average rate on new one-year mortgages moving from 4.48% in March to 4.65% in July. The average new two-year rate moved from 4.71% to 4.98% over the same period.

Those rates remain far below the levels that helped crush Auckland housing demand earlier in the downturn. Current borrowers are therefore dealing with a much easier financing environment than they were a couple of years ago.

What has disappeared is the expectation of continuously cheaper money. Buyers who were waiting for another series of mortgage-rate cuts can no longer treat that outcome as the obvious base case.

Auckland property prices can still rise with an OCR of 2.75%. They did so historically with far higher rates. For that to happen now, stronger employment, rising household incomes and tighter housing supply would need to compensate for borrowing costs that have stopped falling.

So one of the easiest potential catalysts for an Auckland recovery is gone, at least for now.

Interest-rate measure	Earlier level	Latest level	Direction
OCR peak	5.50%	—	—
OCR cycle low	2.25%	—	Large easing completed
OCR currently	—	2.75%	Rising
New 1-year mortgage rate	4.48% in March	4.65% in July	Rising
New 2-year mortgage rate	4.71% in March	4.98% in July	Rising

Is there still too much Auckland property for sale?

Yes. Buyers still have plenty of Auckland homes to choose from, and that is probably the biggest immediate obstacle to higher prices.

Realestate.co.nz reported Auckland sale stock 11.5% higher than a year earlier in its latest August market report. Across New Zealand, 32,908 properties were available for sale, roughly 45% more than at the same point three years earlier.

Barfoot & Thompson alone had 5,870 Auckland homes available at the end of August. The agency sold 787 properties during that month.

That ratio is revealing even though it should not be treated as a formal months-of-inventory calculation. Buyers can walk away from an overpriced house knowing that thousands of other Auckland properties remain on the market.

There is one encouraging development for owners. New listings are starting to slow. Barfoot received 1,456 new listings during August, 10.2% fewer than a year earlier and 6.1% fewer than in July. Its total available stock also slipped from 5,943 to 5,870 during the month.

So the excess supply can gradually clear without requiring a sudden buying frenzy. If sales hold roughly steady while fewer vendors list homes, today's large inventory will eventually shrink.

We would watch total stock more closely than monthly median prices over the next few quarters. Auckland prices are much more likely to rise consistently once buyers feel that walking away from one property means losing something difficult to replace.

Auckland supply measure	Latest reading	Comparison
Auckland available stock	+11.5%	Versus previous year
Barfoot month-end listings	5,870	5,943 one month earlier
Barfoot new listings	1,456	-10.2% YoY
Barfoot sales	787	-11.5% YoY
NZ homes for sale	32,908	~45% above three years earlier

Are Auckland home buyers coming back yet?

First-home buyers are coming back strongly, although Auckland still lacks the broader rush of buyers that usually drives prices sharply higher.

First-home buyers have recently accounted for more than 30% of Auckland purchases according to Cotality, giving them an unusually large role in the market.

Their behaviour makes sense. Someone entering Auckland for the first time sees properties more than 20% below peak values, much better affordability and less competition than buyers faced during the pandemic boom.

Credit conditions are also more accommodating. Banks can now allocate up to 25% of their new owner-occupier lending to borrowers above an 80% loan-to-value ratio. Reserve Bank data show NZ$1.261 billion of new mortgage lending above 80% LVR in July, compared with NZ$718 million two years earlier.

That is roughly a 76% increase, although total mortgage lending has grown over the same period.

The problem is breadth. New Zealand mortgage commitments totalled NZ$7.85 billion in July, below NZ$9.04 billion a year earlier and well below NZ$9.50 billion in March. Existing homeowners looking to move remain relatively cautious, while investors have stronger reasons to hesitate than first-home buyers.

That mix can help Auckland find a floor because first-home buyers keep absorbing properties when prices weaken. A powerful upswing usually requires those buyers to be joined by confident movers and investors.

We are seeing the first part now. The second part has yet to arrive.

Will Auckland property investors start buying aggressively again?

Probably not yet. Auckland rental yields remain too modest to create an obvious rush back into leveraged property investment.

Barfoot's latest suburb figures put the average Auckland three-bedroom property at around NZ$1.007 million, with average rent of NZ$702 a week. That produces a gross rental yield of about 3.63%.

Some suburbs work better. Waterview was around 4.26% and Three Kings around 4.07%. Expensive established areas offer much less income: Mount Eden was around 2.67%, Grey Lynn around 2.65% and Point Chevalier around 2.63%.

Those figures are before rates, insurance, maintenance, vacancy, property management and financing.

A gross yield of 3.63% looks thin when new mortgage rates sit around the mid-4% range or higher. An investor using substantial debt can still buy for long-term capital appreciation, tax considerations or redevelopment potential, but the property itself often produces weak cash flow.

Auckland rents are providing little help. Trade Me's latest Rental Price Index put Auckland's median asking rent at NZ$655 a week in July, down from NZ$660 in June. National rents were unchanged year-on-year, and Trade Me found the national median had failed to move in eight of the previous nine months.

Investors will eventually become more important if purchase prices stay subdued while rents climb or financing becomes cheaper again. Today's numbers do not create that urgency.

Auckland rental measure	Latest level
Median Auckland asking rent	NZ$655/week
Average 3-bedroom sale price	NZ$1.007m
Average 3-bedroom rent	NZ$702/week
Average 3-bedroom gross yield	3.63%
Waterview gross yield	4.26%
Mount Eden gross yield	2.67%
Point Chevalier gross yield	2.63%

Are Auckland rents strong enough to lift house prices?

No. Auckland rents are currently too flat to give house prices a meaningful push.

Trade Me recorded a median Auckland asking rent of NZ$655 a week in July after NZ$660 the previous month. Across New Zealand, the median rent remained NZ$620 and was unchanged from a year earlier.

The strange part is that renter interest has remained healthy. Trade Me reported national rental search activity up 15% year-on-year in June, yet rents still failed to rise.

Available rental supply seems to be absorbing that demand surprisingly well.

For Auckland investors, stagnant rents mean yields improve mainly when property purchase prices fall. Rapid rental growth would create a different equation because investors could pay more for a property while preserving their expected return.

We are not seeing that dynamic today.

Auckland's rental market could become much more important later if migration accelerates while rental construction slows. Until that happens, rents provide some support for property values without giving investors a strong reason to chase prices upward.

Is Auckland still building enough homes to keep prices down?

Yes, for now. Auckland still has enough new housing flowing through the market to make another sudden shortage difficult.

The scale of Auckland construction changed enormously during the last cycle. Annual dwelling consents rose from only a few thousand in the early 2010s to more than 17,000 around the recent peak.

Consent issuance has since fallen sharply, yet the housing market still receives projects approved during the high-construction years. Townhouse developments can take years to move from planning and consent through financing, construction, completion and final sale.

Cotality specifically points to Auckland's continuing new-housing pipeline as one reason current buyer-friendly conditions may last.

This is one of the biggest differences between today's Auckland market and earlier cycles. Buyers now have far more townhouses and medium-density alternatives in suburbs where supply used to consist mainly of existing standalone houses.

Construction cannot remain high forever if developers struggle to make projects profitable. Land, labour, finance, infrastructure contributions and building materials remain expensive, while soft selling prices make new projects harder to justify.

That sets up a delayed supply squeeze rather than an immediate one. Fewer projects being started today can eventually reduce the number of homes arriving two or three years from now.

The Auckland housing market currently has enough supply. The more interesting bullish case begins if that pipeline empties while demand starts growing again.

Will population growth push Auckland house prices up?

Eventually it can, but Auckland currently lacks the huge migration shock that would force buyers and renters to compete aggressively for housing.

Auckland's estimated population reached roughly 1.82 million in Stats NZ's latest available subnational estimates. The city remains New Zealand's largest population centre by a wide margin, and its long-term need for additional homes has not disappeared.

Recent migration has been much softer than during the post-border reopening surge. New Zealand recorded only modest net migration gains after the extraordinary inflows seen earlier in the decade.

The direction has started to improve, which is worth watching more closely than the headline annual number. Quarterly net migration has been picking up again after weakening sharply.

For Auckland property, that creates a possible future squeeze because migration can recover faster than housing construction. Thousands of extra households can start looking for rentals relatively quickly, while producing thousands of new homes takes much longer.

Still, we would want to see the migration improvement continue for several quarters before treating it as a major Auckland price driver.

Population growth supports the long-term case for owning scarce Auckland land. Today's market has enough available housing to absorb that demand without producing widespread bidding wars.

Is Auckland's weak economy holding house prices down?

Yes. Auckland's soft labour market is one of the main reasons cheaper housing has failed to trigger a stronger property recovery.

Stats NZ recorded only 0.5% year-on-year growth in filled Auckland jobs in June, equivalent to roughly 4,200 additional positions. Canterbury was growing almost four times faster at 1.9%.

The Reserve Bank has also singled out Auckland and Wellington when discussing weak household demand. It says weak income growth, job insecurity and flat house prices are weighing on household spending and residential investment particularly heavily in those two cities.

That helps explain why improving affordability has produced relatively cautious buyers.

Buying an Auckland home typically means taking on a mortgage measured in hundreds of thousands of dollars. A household worried about job security may qualify for that mortgage and still decide to wait.

Regional New Zealand currently benefits more directly from strong export prices and farming income. Auckland relies heavily on professional services, construction, retail, hospitality and other parts of the economy that react strongly to household confidence and financing conditions.

We would become much more positive on Auckland prices once job creation clearly accelerates. Stronger employment could release demand that improved affordability has already made financially possible.

Can Auckland lending rules stop another property boom?

Auckland prices can still rise under New Zealand's lending rules, although another debt-fuelled boom should be harder to produce.

Banks currently have room to make more low-deposit owner-occupier loans than they did under the tightest previous LVR settings. That helps first-home buyers and removes one barrier to a recovery.

Debt-to-income rules provide the stronger ceiling once prices begin accelerating. Banks can only put a limited share of new lending into mortgages where debt becomes very high relative to borrower income.

That changes the mechanics of a future Auckland boom.

During earlier housing cycles, rising prices allowed owners to build equity, borrow more, compete for additional properties and push valuations higher again. DTI limits restrict how far that process can run when household incomes fail to keep pace.

The Reserve Bank currently describes housing-related financial stability risks as contained. Mortgage credit growth remains manageable and high-risk lending has not reached levels that worry policymakers.

That gives Auckland room for normal price appreciation.

A return to 20% or 30% annual growth would be much harder to finance unless household incomes were also rising exceptionally quickly or cash-rich buyers became a much larger part of the market.

Which Auckland properties are most likely to rise first?

Standalone Auckland houses on scarce, desirable land have a better setup for the next recovery than generic properties with plenty of nearby substitutes.

Auckland's supply boom has been heavily concentrated in townhouses and other medium-density housing. Buyers in those segments can often choose between several similar projects within the same area, which limits how far one vendor can push the price.

Established standalone homes behave differently when the land itself is difficult to reproduce. School zones, transport access, views, larger sections and tightly held streets can create scarcity even while Auckland's overall listing count remains high.

Apartments deserve separate treatment. Cotality's latest resale study says Auckland's unusually high proportion of loss-making sales is partly connected to apartment weakness. Barfoot's Central Auckland transactions also show how cheap some apartment stock has become, with the area's latest average sale price heavily influenced by low-value units.

The spread across Auckland is already huge. Barfoot's August average sale price was around NZ$1.415 million in the Eastern Suburbs and NZ$1.253 million on the North Shore, compared with roughly NZ$873,000 in South Auckland and NZ$878,000 in West Auckland.

Those figures are area averages rather than like-for-like valuations, but they illustrate why one Auckland forecast can mislead.

When the recovery eventually strengthens, we would expect constrained family-home markets to respond more quickly than locations where buyers can choose among many similar townhouses or apartments.

Barfoot area	Average August sale price	Annual sales change
Eastern Suburbs	NZ$1.415m	-10.6%
North Shore	NZ$1.253m	+1.4%
Pakuranga/Howick	NZ$1.249m	-8.8%
Rodney	NZ$1.231m	+9.1%
West Auckland	NZ$878k	-23.1%
South Auckland	NZ$873k	-25.0%
Central Auckland	NZ$331k	+26.3%

Could Auckland property prices still fall another 10%?

Auckland-wide prices could fall another 10%, although today's evidence makes that a downside scenario rather than the most likely outcome.

The ingredients for more weakness are easy to find. Mortgage rates have started rising again, available stock is high, rents are flat, employment growth is weak and values have continued slipping across almost every Auckland sub-market.

The resale data also show genuine stress. More than one in five Auckland homes resold during the June quarter changed hands below their previous purchase price. That is a very poor result by Auckland's historical standards.

Several buffers now make another 10% decline harder to reach.

Housing affordability has already returned close to normal. Major Auckland areas have lost at least one-fifth of their peak value. First-home buyers are taking a large share of purchases. There is also little evidence today of mass mortgage distress forcing large numbers of owners to sell regardless of price.

Another Auckland-wide 10% fall would therefore probably require conditions to deteriorate from here. A much larger interest-rate shock, a serious rise in unemployment or a wave of forced selling could do it.

Without that kind of shock, a few more percentage points of weakness or an extended period of flat prices looks much easier to defend.

Could Auckland house prices stay flat for years?

Yes. Several more years of mostly flat Auckland house prices are more plausible than many buyers and owners assume.

New Zealand has already shown how this can happen. Realestate.co.nz's latest report puts the national average asking price at NZ$849,362, only 3.2% below the same point three years earlier, while the number of homes for sale has increased by roughly 45%.

Prices barely moved despite a huge change in available choice.

Auckland could follow a similar path. Household incomes can keep rising while nominal house prices move sideways, gradually making property cheaper relative to earnings without producing another dramatic nominal crash.

Inflation strengthens that effect. A NZ$1 million house that is still worth NZ$1 million several years later has become cheaper in real terms if wages and general prices have risen in the meantime.

This scenario fits quite well with current Auckland conditions. Affordability is repairing, owners generally have enough financial capacity to avoid distressed selling, buyers have plenty of choice and lending rules make runaway leverage harder.

Auckland therefore has another route out of the downturn besides a sharp rebound.

For anyone expecting the previous peak to be recovered quickly, prolonged stagnation may be the bigger risk than another spectacular crash.

When could Auckland property prices start rising properly?

A sustained Auckland property recovery looks more plausible during 2027 than over the next few months.

Cotality's latest assessment reaches a similar broad timing conclusion. Its chief property economist says consistent house-price growth remains a low-probability outcome until the labour market and job security improve more clearly, which may take us well into 2027.

That logic makes sense because several stages still have to happen.

Available Auckland listings need to come down. Employment and household confidence need to strengthen. Buyers then need to respond through higher sales volumes. Only after enough spare inventory has been absorbed should vendors regain enough pricing power to produce consistent increases.

Some of those pieces are starting to move. Barfoot's new listings were down 10.2% year-on-year in August. Auckland affordability is much healthier. First-home buyers remain active. Migration also has the potential to improve the demand side.

Higher interest rates make the timing less comfortable. As pointed out above, the OCR has moved back up to 2.75%, so Auckland is trying to recover without the extra help of another obvious round of monetary easing.

Individual months can easily show higher medians before then. Barfoot's NZ$955,000 August median already demonstrates that.

We would call the Auckland recovery real when comparable-property values, sales volumes and inventory all start improving together for several months. We are not there yet.

Will property prices rise in Auckland?

Yes, Auckland property prices will probably rise again, but a meaningful broad-based recovery looks more likely from 2027 onward than right now.

The long correction has already done most of the work needed to create a floor. Every major Auckland area is at least 20% below its previous peak. Housing affordability has returned close to historical norms. First-home buyers are active, and the pipeline of future housing supply should eventually shrink as weaker development economics feed through.

Auckland still has too much working against an immediate surge. Property values are currently falling, buyers have a large amount of stock to choose from, rents are flat, employment growth is weak and borrowing costs have started moving higher again.

That mix points toward more stagnation before acceleration.

Our base case is therefore a market that spends the near term moving around its floor, with the possibility of modest further declines in some areas, followed by a better chance of sustained growth as employment improves and excess listings are absorbed.

The next cycle should also be much more selective than Auckland's previous boom. Standalone houses on scarce land can recover faster than apartment-heavy areas or neighbourhoods with large numbers of similar new townhouses. DTI rules and mediocre rental yields should also keep investor leverage under tighter control.

We would become materially more bullish if three things happen together: Auckland employment starts growing convincingly, total sale inventory falls for several quarters, and migration strengthens while new housing completions slow. Those conditions would turn today's improved affordability into genuine competition between buyers.

For now, Auckland looks closer to the bottom than to a boom. Prices are likely to rise eventually, and 2027 currently offers the more convincing window for that recovery to become visible. Anyone expecting the old Auckland pattern of falling rates followed almost immediately by rapidly rising house prices is getting ahead of the evidence.

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