Should you buy real estate in New Zealand now?

Get all the data you need about the real estate market in New Zealand

Is New Zealand property finally cheap enough to buy?

New Zealand property is reasonably priced again by its own historical standards, although today’s market still falls short of what we would call genuinely cheap.

Cotality’s latest Home Value Index puts the national median property value at NZ$797,944. Values are now around 18% below the previous peak, while remaining roughly 15% above their pre-COVID level. The correction has therefore erased a large chunk of the pandemic boom without bringing property back to old price levels.

Affordability gives us a better reason to take the market seriously. Cotality’s latest affordability work puts the national property-value-to-household-income ratio at 6.7, exactly in line with its average since 2004. A typical 20% deposit now takes about 8.9 years to save, close to the long-run average of nine years. Mortgage repayments for a recent buyer consume roughly 40% of median gross household income, slightly below the historical average of around 42%.

Those three measures have all returned to roughly normal territory after becoming extreme during the boom. That is a real change.

We would still avoid calling New Zealand housing cheap. A NZ$798,000 median home remains expensive in absolute terms, and affordability differs enormously between cities. What has disappeared is much of the obvious overvaluation that made buying near the top so difficult to defend.

Measure	Around the recent extreme	Currently	What we take from it
National values vs peak	Peak	~18% lower	Large correction already happened
Values vs pre-COVID	Baseline	~15% higher	Prices remain well above old levels
Value-to-income ratio	Far above normal	6.7x	Back around long-run average
Mortgage servicing	~56% at the worst point	~40%	Much more manageable
Years to save 20% deposit	13.4 years at peak	8.9 years	Close to historical norm

Are New Zealand house prices actually going up now?

No. New Zealand house prices are still slipping, and the latest figures give us very little evidence that a broad recovery has started.

Cotality’s newest Home Value Index recorded another 0.4% national decline, making it five consecutive months of falling values. The national median value is also 1% lower than a year earlier.

REINZ’s latest completed-sales data points in the same direction. Its national median sale price was NZ$760,000, down 0.7% from a year earlier, while the House Price Index fell 0.4%.

The declines themselves are small. Five months of consecutive falls matter more than any single monthly number because cheaper mortgages had already given the market plenty of opportunity to recover. Instead, prices have continued to drift.

Sales are soft as well. REINZ recorded 6,090 residential transactions in its latest report, down 10% year on year. Properties took a median 50 days to sell, while available inventory reached 33,252 homes, 9.3% more than a year earlier.

REINZ notes that current sales volumes are still around the historical midpoint for this part of the year, so we are not looking at a frozen market. Buyers are simply in no hurry.

That makes today unusually comfortable for someone looking to purchase. There is little evidence of a new boom forcing buyers to chase the market.

Latest market measure	Reading	Year-on-year change
Cotality national median value	NZ$797,944	-1.0%
Latest monthly Cotality move	-0.4%	Fifth consecutive decline
REINZ national median price	NZ$760,000	-0.7%
Residential sales	6,090	-10.0%
Inventory	33,252	+9.3%
Median days to sell	50 days	+2 days

Why hasn’t cheaper borrowing restarted the New Zealand property boom?

Cheaper borrowing has helped New Zealand buyers, but weak confidence, job insecurity and plenty of homes for sale have absorbed most of that boost.

This is probably the most important tension in the market today. Mortgage costs fell dramatically from their highs, affordability improved, investor tax rules became friendlier and first-home buyers returned. Under more bullish economic conditions, that combination might have pushed prices sharply higher.

It hasn’t.

New Zealand’s unemployment rate is currently 5.6%, according to Stats NZ, and the Reserve Bank says weak income growth and job insecurity are still weighing on households, particularly in Auckland and Wellington. A buyer considering a NZ$600,000 mortgage cares just as much about keeping a job as saving half a percentage point on the loan.

High inventory compounds the problem. Cotality says buyers currently have little reason to rush because so many properties remain available. REINZ’s 9.3% annual increase in inventory confirms that nationally.

The contrast with the pandemic boom is useful. Back then, rapidly falling borrowing costs met intense demand, very strong confidence and fear of missing out. Today, potential buyers can often negotiate, walk away and find another property.

Improved affordability has mostly stopped prices from falling quickly rather than launching another boom.

Have New Zealand mortgage rates already fallen enough to make buying attractive?

Yes for many owner-occupiers, but New Zealand mortgage rates have recently started moving the wrong way again, so we would stop assuming that financing will keep getting cheaper.

Reserve Bank data shows how big the improvement has been. The average rate actually paid on new one-year fixed mortgages was 4.62% in the latest available monthly data, versus 6.88% two years earlier. Six-month mortgages averaged 4.65%, while two-year borrowing averaged 5.00%.

For a NZ$600,000 mortgage over 30 years, a drop from around 6.9% to 4.6% cuts the approximate monthly repayment from roughly NZ$3,950 to around NZ$3,080. That is more than NZ$10,000 a year.

The newest monetary-policy decision complicates the picture. The Reserve Bank has now increased the Official Cash Rate to 2.75% after inflation reached 4.1%. It described the move as part of a gradual removal of monetary stimulus.

Longer fixed mortgage rates had already started edging higher before that decision. The average two-year new mortgage rate rose from 4.64% earlier in the year to 5.00% in the latest available data.

We would not buy today on the assumption that another large fall in mortgage rates will rescue the numbers later. A property should already be comfortable to own at roughly current financing costs.

Mortgage term	Latest new-loan average	Two years earlier	Change
Floating	5.53%	8.30%	-2.77 pp
6 months	4.65%	7.12%	-2.47 pp
1 year	4.62%	6.88%	-2.26 pp
18 months	4.82%	6.76%	-1.94 pp
2 years	5.00%	6.70%	-1.70 pp
Official Cash Rate	2.75%	—	Recently increased

Could New Zealand house prices still fall a lot further?

A few more percentage points of downside would not surprise us, but another nationwide collapse of 15% or 20% currently looks much harder to justify.

Cotality describes the market as cautious rather than distressed, and that fits the wider evidence. National values are already around 18% below peak, affordability has normalised and the Reserve Bank says housing-related financial risks are currently contained.

The resale market gives us a useful stress test. Cotality’s latest Pain and Gain report found that 13.1% of properties were resold below their previous purchase price. That is the highest loss rate in years, yet 86.9% of resales still achieved a nominal gross gain.

Holding period explains much of the difference. Properties selling for a profit had been owned for a median 10.4 years, the longest period in Cotality’s series. Properties selling at a loss had typically been held only 4.3 years, putting many of those purchases around the 2021–22 peak.

The risk is fairly easy to understand. A buyer who may need to sell again in three years is still taking a meaningful gamble. Someone buying a good property with a ten-year horizon faces a much more forgiving setup.

Cotality itself now considers another major fall less likely because affordability has already improved so far. Its economists still see consistent price growth as unlikely until job security improves more convincingly.

For now, stagnation with occasional small declines looks more plausible than either a crash or a boom.

Is Auckland property worth buying now?

Auckland property is attractive again for patient long-term buyers because prices have fallen more than 20% from peak across every major submarket, although we would be extremely selective about what we buy.

The newest Cotality figures show another 0.5% monthly fall in Auckland. North Shore and Rodney dropped 0.6%, Auckland City fell 0.5%, Manukau 0.4% and Waitākere 0.2%. Franklin was the only major submarket to hold flat.

Every Auckland submarket remains at least 20% below its previous peak. Manukau, Waitākere and Auckland City are also down at least 2.5% over the past year.

That is a huge difference from buying Auckland during the boom. Buyers today can inspect multiple properties, negotiate harder and reject mediocre stock without assuming prices will be higher next weekend.

Supply is the main reason we would stay picky. Auckland has built a large number of townhouses and other medium-density homes, and Cotality specifically expects the new-housing pipeline to keep conditions buyer-friendly.

We would therefore prefer properties where supply cannot easily be replicated: useful land, established neighbourhoods, strong school zones, transport access and genuinely scarce locations.

A generic townhouse surrounded by another hundred similar townhouses deserves a very different valuation from a well-located house on scarce land, even when both carry the Auckland label.

Is Wellington property actually a bargain now?

Wellington property has become genuinely interesting after falls of roughly 23% to 28% from peak, but anyone buying today is making a fairly direct bet on the city’s economic recovery.

Few large New Zealand markets have corrected as deeply. Cotality puts the fall from peak at 22.9% in Kāpiti Coast and as much as 28.4% in Lower Hutt. Wellington City declined another 0.5% in the latest month, while Porirua fell 1%.

Affordability has improved so much that Wellington now looks unusually inexpensive relative to its own history. First-home buyers seem to have noticed: Cotality says they recently accounted for roughly 35% to 40% of activity across the wider region.

The economic backdrop is still uncomfortable. Wellington has been hit hard by weakness around government employment, and the Reserve Bank recently singled out Wellington alongside Auckland when discussing job insecurity, weak household spending and flat property values.

That is precisely why the discount exists.

A long-term buyer who expects Wellington’s labour market to stabilise is buying some properties roughly a quarter below their peak. An investor hoping to flip the same property within three years has a much weaker thesis.

We like Wellington more for ten-year buyers than for people trying to call the next 12 months.

Wellington area	Approximate decline from peak	Latest monthly direction
Kāpiti Coast	-22.9%	Lower
Wellington City	Mid-20% range	-0.5%
Porirua	Mid-20% range	-1.0%
Lower Hutt	-28.4%	Lower
Wider Wellington	Deep correction	Still soft

Is Christchurch safer than Auckland and Wellington right now?

Christchurch currently looks like the strongest of New Zealand’s three largest housing markets, particularly for buyers who care more about stability than finding the biggest discount.

Cotality’s latest figures make Christchurch the only major centre where values actually increased during the month, although the gain was only 0.1%. Auckland fell 0.5% and Wellington fell 0.6%.

Christchurch also stands out in the resale data. Only 5.3% of Christchurch properties in Cotality’s latest quarterly analysis were resold for a loss, compared with 20.9% in Auckland and 18.4% in Wellington.

That gap is huge.

Part of Christchurch’s resilience comes from starting from a less stretched position. The city did not experience exactly the same magnitude of boom as Auckland, and housing remains considerably cheaper in absolute terms.

Canterbury also has a broader economic base than government-heavy Wellington, while agricultural and export activity currently provides useful support to parts of regional New Zealand.

The obvious trade-off is that Christchurch offers less recovery upside from a deep crash because the crash itself was milder.

If we wanted the strongest current market among the three major cities, Christchurch would be our pick. If we wanted the largest contrarian discount, Wellington would be much more interesting.

Do New Zealand rental yields make investment property worth buying?

New Zealand rental yields are still too thin for us to call the average leveraged investment property attractive today.

Trade Me’s latest Rental Price Index puts the national median advertised rent at NZ$620 a week. Rents were flat both month on month and year on year after already cooling from their earlier highs.

Annualising NZ$620 gives NZ$32,240 in gross rent. Against REINZ’s NZ$760,000 national median sale price, that works out to a rough gross yield of 4.2%.

Mortgage costs sit around the same level or higher before the landlord pays anything else. New two-year borrowing has averaged roughly 5%, and operating costs still include council rates, insurance, maintenance, vacancies and potentially property management.

A 70%-leveraged investor buying around the national median would therefore begin with the interest rate above the property's gross yield. The calculation can improve depending on the deposit, exact rent and tax position, but the average deal does not produce much breathing room.

Flat rents make the setup less forgiving. Trade Me recorded a 15% annual increase in rental search activity while median rent still failed to rise. Strong tenant interest has so far been unable to translate into higher national asking rents.

For an investor, capital appreciation still has to do a fair amount of the work.

Investment measure	Current reading	Our interpretation
National median weekly rent	NZ$620	Income has stalled
Annualised rent	NZ$32,240	Before expenses
Rough gross yield vs NZ$760k price	~4.2%	Mediocre
New 1-year mortgage rate	~4.6%	Around gross yield
New 2-year mortgage rate	~5.0%	Above gross yield
Annual rent growth	0%	Little help from income growth

Are New Zealand apartments worth buying for the higher yield?

New Zealand apartments can produce attractive headline yields, but the latest resale numbers are bad enough that we would demand a serious discount before buying one purely for investment.

Cotality found that 45.2% of apartment resales in its latest quarter sold for less than the previous purchase price. The loss rate had jumped from 39.4% one quarter earlier and reached its highest level since 2010.

Standalone houses were far more resilient: only 12.2% resold at a loss.

Price performance tells the same story. Apartment values have fallen roughly 6% over the past year, compared with around 2% for townhouses and broadly flat values for standalone homes.

Higher apartment yields therefore need to be interpreted carefully. A central-city unit might generate 5% or 6% gross rent while still losing enough value to wipe out the entire year's rental return.

Body-corporate fees, maintenance and building-specific risks add another layer that a simple rental-yield table rarely captures.

There will absolutely be individual apartments worth buying, particularly at distressed prices in buildings with clean finances and strong owner-occupier appeal. Across the market, though, we would rather accept a slightly lower rental yield on a scarce property than chase a higher yield from an apartment whose capital value keeps deteriorating.

Is New Zealand still short enough of housing to push prices up?

New Zealand does not currently have the sort of obvious nationwide housing shortage that would make a rapid scarcity-driven price boom our base case.

The latest annual building-consent figures from Stats NZ are surprisingly strong. New Zealand consented 40,581 new homes over the year, up 19% from the previous 12 months.

That pipeline is significant relative to current population growth.

The latest official population estimate available from Stats NZ puts the country at roughly 5.36 million people. Migration has picked up from its recent low as well: net migration reached 24,200 in the year to March 2026, compared with 14,000 a year earlier.

That is supportive for housing demand, but it is still a long way from the extraordinary migration surge New Zealand experienced earlier in the cycle.

The geographic detail matters more than the national total. Forty thousand consents do little for a buyer looking for a detached house in a tightly held central suburb if most new supply consists of apartments and fringe townhouses elsewhere.

Still, the aggregate picture makes one strategy particularly risky: buying a generic new property simply because “New Zealand needs more houses.”

These days, we would pay for scarcity we can actually identify rather than scarcity assumed from the national housing story.

Are New Zealand’s tax and mortgage rules good for property investors now?

New Zealand has become friendlier to landlords again, but current tax and lending rules still reward investors with plenty of equity more than highly leveraged buyers.

The biggest tax improvement is interest deductibility. Inland Revenue now allows eligible residential investors to deduct 100% of their mortgage interest, reversing the earlier phase-out.

The bright-line period has also been shortened substantially. For properties covered by the current rules, the bright-line test generally applies to disposals within two years, although other land-sale tax rules can still apply.

Those changes remove two major complaints investors had during the previous policy regime.

Borrowing rules still put a ceiling on aggressive leverage. The Reserve Bank currently allows banks to direct only 10% of new investor lending above a 70% loan-to-value ratio. Debt-to-income restrictions also remain in force.

Owner-occupiers receive somewhat more room: up to 25% of new lending can sit above an 80% LVR.

The interesting part is what has happened despite friendlier investor policy. House prices are still falling slightly and mortgaged multiple-property buyers have not rushed back strongly enough to change the national trend.

Tax rules were only one part of the previous weakness. With yields around 4% and mortgage rates near 5%, the underlying investment numbers remain more important.

Rule	Current position	Effect on investors
Mortgage interest deductibility	100% eligible interest deductible	Clear improvement
Bright-line period	Generally 2 years under current rules	Less restrictive than before
Investor high-LVR lending allowance	10% above 70% LVR	Limits aggressive leverage
Owner-occupier high-LVR allowance	25% above 80% LVR	More flexibility for home buyers
DTI restrictions	Still active	Caps some highly indebted borrowing

Can foreigners actually buy residential property in New Zealand now?

Most overseas buyers still cannot freely buy ordinary New Zealand homes, although a new NZ$5 million pathway has opened the door for qualifying investor-visa holders.

Land Information New Zealand remains clear that overseas people generally cannot purchase ordinary houses or residential land.

New Zealand citizens can buy freely, as can permanent residents who meet the “ordinarily resident” requirements. Someone holding a residence-class visa without yet qualifying as ordinarily resident can potentially obtain consent to buy or build one home to live in.

The biggest recent change concerns wealthy investor migrants. Holders of Active Investor Plus, Investor 1 or Investor 2 visas can now seek consent to buy or build one residential property worth more than NZ$5 million.

LINZ says qualifying applications under that pathway will generally be processed quickly, with an application fee of NZ$2,040 for an existing property above NZ$5 million or NZ$3,500 when land and construction together exceed that threshold.

Broader restrictions on overseas purchases of residential land remain.

For an international investor, this eligibility check needs to happen before comparing Auckland yields with Christchurch prices. New Zealand still operates a much more restrictive foreign-buyer regime than many international property markets.

What kind of New Zealand property would we actually buy today?

We would currently concentrate on houses and genuinely scarce townhouses in established areas, while being much more cautious with interchangeable new-build stock and investor-heavy apartment buildings.

The resale evidence is difficult to ignore. As seen above, apartments have performed far worse than standalone houses, with 45.2% of recent apartment resales making a loss against 12.2% for standalone properties.

Auckland's construction pipeline adds another reason to care about property type. A newly built townhouse may look modern and require little maintenance, but its resale value becomes vulnerable when another nearly identical development appears nearby.

Established land behaves differently. Developers cannot manufacture another North Shore coastline, another street inside a tightly held school zone or another inner-suburban section with good transport access.

We would therefore put location scarcity ahead of shiny finishes.

Good properties can still be bad purchases if the price is wrong, of course. The useful advantage today is that buyers generally have enough choice to refuse that price.

Better affordability, plenty of listings and no urgent upward price pressure are probably the best parts of the New Zealand market right now.

Should you buy real estate in New Zealand now?

Yes, if we are buying a good property for the long term; for a highly leveraged investor chasing quick capital gains, we would still wait for a better deal.

New Zealand has moved far enough through its correction for the purchase decision to look very different from the boom years. National values are around 18% below peak. The value-to-income ratio has returned to its long-term average. Mortgage servicing has fallen from roughly 56% of median household income at its worst to around 40% now.

Buyers also have bargaining power. Prices have fallen for five consecutive months, annual sales are soft, inventory is up 9.3% and properties are taking around 50 days to sell.

We would use those conditions rather than fear them.

The case becomes much weaker for an average leveraged rental. National gross yields sit around 4.2%, median rents are flat, new two-year mortgage borrowing costs around 5%, and operating expenses come on top. Full interest deductibility helps, but it cannot make weak cash flow disappear.

City selection changes the answer further. Auckland offers a discount of at least 20% from peak across its main submarkets, with plenty of supply giving buyers time. Wellington offers even deeper discounts but asks us to accept more economic risk. Christchurch has held up considerably better and currently gives us the cleanest combination of relative stability and reasonable prices.

We also would not wait simply because prices could fall another few percent. There is no clear sign of a strong rebound yet, so buyers can negotiate hard today. At the same time, much of the national correction has already happened and affordability is back around historical norms. Waiting for another 20% crash looks increasingly speculative.

The newest data sharpens the conclusion. House prices have just recorded a fifth straight monthly decline, while the Reserve Bank has increased the OCR to 2.75%. Anyone buying now should assume modest near-term price growth and financing costs around today's levels rather than building the decision around cheap money or another boom.

For a home we genuinely want to own for seven to ten years, that setup is good enough.

For an investor buying whatever property happens to produce a spreadsheet yield and hoping the market rises quickly, it still isn't.

Who is the author of this content?

BAMBOOROUTES

A team specialized in real estate investing in APAC countries (Japan, Thailand, Indonesia, Australia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in New Zealand. If you’d like to learn more about us, you can check our presentation page.