New Zealand Property Market Performance | Analysis

Updated property market analysis to make sure you invest in the right region in New Zealand.


Ed McKnight

Economist, property investor and host of the Property Academy Podcast

The NZ property market is a living beast. This means, year-to-year investors see big changes to the market, both for New Zealand (as a whole) and for each specific region.

While yearly round-ups are great, what many impatient property investors want to know is: How the market is behaving right now?

In this article, you’ll learn all about the most recent house price updates, rents, who’s buying the houses, what interest rates are doing – all to keep you informed about what’s going on in the property market.

True to our data-nerd form, we’ve put together a few wee graphs to help show you exactly what’s happening and what the trends mean for you.

How Quickly Are They Increasing?

How Quickly Are Property Prices Increasing In The NZ Property Market?

Property prices are currently falling.

New data (released mid-June) showed that house prices fell another 1.6% between May 2022 and the month before.

In total, the NZ property market fell 7.7% between the price peak in November 2021 and May 2022 (REINZ House Price Index).

It’s certainly a big change of pace compared with the rocket-fire increases of the last few years. In just 18 months the NZ property market rose 45.6% (May 2020 – November 2021).

How far will house prices fall?

The Reserve Bank currently predicts a total drop from the November peak of 11-15% (depending on whether you look at quarterly or monthly data), before house prices begin to recover.

But this figure goes up and down depending on who you listen to. Most economists and financial commentators pick a 10-15% drop compared to November’s peak.

It’s worth mentioning too that while NZ house prices have dropped since November, annual house price growth is still positive (but dropping sharply). That’s because house prices are still higher than they were at the same time last year.

As you can see from the above graph, property price growth regularly rolls up and down in waves.

This means there is nothing new about this most recent dip. All stable asset classes – like shares and property – tend to go through cycles. Prices boom, peak, fall, and then recover and go through a boom again.

How Fast Will They Rise In The Future?

How Fast Will House Prices Rise in the Future?

While house prices rose 30.62% between August 2020 - 2021, that level of annual growth is unlikely to return any time soon.

Over the last 30 years in New Zealand, house prices rose an average of 7.2% per year (January 1992 – May 2022).

Even this level of house price increase is unlikely to continue in the future, according to independent economist Tony Alexander.

“It pays to remember the long-term trend in prices is upward. Since 1992, on average New Zealand house prices have risen 7% per annum. I think we’re looking at 5% per annum going forward.”

Here at Opes Partners, we use a 5% annual capital growth rate when estimating the long-term trend for growth-focussed houses, outside Auckland. And in Auckland we use 6% as standard, although this can change based on other factors related to the property itself.

Where's The Heat In The Market?

Where’s The Heat In The Market? Where Have Property Prices Increased The Fastest In The Last 12 Months?

A nationwide average is one thing, but this isn’t to say that individual regions are all experiencing the same effects equally … or at all.

Let’s take a look at the map and see where prices are rising the fastest.

Coming in hot is: Otorohanga District. Here, house prices grew the fastest at 57.34%, between Apr 21 and Apr 22.

On the other end of the scale, Wellington City saw the greatest house price fall with minus 9.41% between the same timescale.

Our other major cities have also seen a slowdown in house price growth over the last year.

Auckland’s annual growth sits at only 2.68%; Hamilton City grew by 6.05% in the prior year; Dunedin puttered along at 2.11%.

However, much of Canterbury did well. Selwyn and Waimakariri districts remained relatively strong with 24.78% and 24.99% annual property market increases respectively.

And the Christchurch City property market grew 19.29%.

So, what does this mean for investors? How should they respond to these changes?

Let’s say you own a property in Otorohanga District. Because properties have gone up 57% in the area, you might like to take a new look at your equity position. Perhaps you’re now in the position to buy your next investment property, where you might not have been able to before.

Whereas, for investors in Auckland and Wellington … you might be best placed to sit tight on your investment for a while.

Who's Buying Them?

Who’s Buying All The Houses?

First Home Buyers are shying away from the housing market compared to where they were last year, according to CoreLogic’s Buyer Classification Data.

nz property market

Last quarter, First Home Buyers accounted for around a quarter of all purchases. This is now down to 21%.

This is an abrupt shift down from where First Home Buyers made up a record 26.4% of all purchases in the July - September quarter in 2021.

This is most likely a result of tight LVRs, high mortgage interest rates, and November’s CCCFA announcement.

Mortgage investors have also seen a bit of a fall to 23.2%, but the fall is not as sharp.

People selling their main home to purchase another (i.e. movers) remain the most active in the market, with 27.4% market share.

Investors, buying with cash, have shot up in the rankings and make up 15% of the market.

Where Might They Increase More Quickly In The Future?

Where Might House Prices Increase More Quickly In The Future?

With all this in mind, where do we think house prices might increase most quickly in the future?

To answer this question we look at where prices are higher or lower than we would expect them to be. You can read more about this method on any of our property market pages, like this one on the Auckland property market.

The blue areas are those where house prices are below the level we would expect them to be; red shows areas where house prices are higher than we’d expect them to be.

According to our analysis, districts in Canterbury and the top of the South Island are most undervalued.

Conversely, districts in Wellington and the bottom of the North Island appear to be most overvalued.

This suggests there is more potential for capital growth over the next few years in these Southern districts rather than in the lower North Island.

Where Have Rents Increased The Fastest?

Where Have Rents Increased The Fastest?

Rent increases around the country are more inconsistent. We’ll see one district seeing rapid increases, but its neighbour does not.

This is more down to how the data is calculated (change in median rent), as opposed to any underlying statistical driver.

Because we are measuring the change in median rent, the figures can jump around, especially in smaller districts where fewer properties are rented month to month.

That does mean that a sharp change in the median rent may not be representative of what an individual property investor could put their rent up by.

Nonetheless, they’re still interesting to look at.

Wairoa District saw the highest rent increase in the country, with median rents jumping from $300 to $415 between Apr 21 and Apr 22. That’s a substantial increase of $115 extra a week.

Other front-runners in the North Island are the Rangitikei, Otorohanga and Kaipara districts. All of which are seeing a $100+ increase in the average rent per week.

It’s not surprising these large changes happen in small and low population districts. That’s because when there are few properties available for rent at a time, a small change in the properties listed can dramatically change the average rent.

This would be the case if a few high-end properties came on the market, which pulled up the average.

The major cities saw a marginal increase. Auckland and Wellington city both saw an equal 3% increase, which translates to a weekly increase of $20 and $15, respectively.

In the South Island, Clutha District saw the largest increase of 27%, a median rent jump from $300 to $380. But its neighbour, Gore District, was the lowest in the country. In Gore rents fell 15%, moving the median rent down from $325 to $275.

Let’s say you're an investor in Wairoa District - and you can see from this map that the median rent increased - it might be a great time to review your rent.


For a more in-depth article on how much you can increase your rent click to our article. You might find that your property is currently rented out for lower than market value.

What Should I Look Out for?

What Should I Be Looking Out For As A Property Purchaser?

As all investors know, there are a myriad of factors that influence the surge and sag of the property market.

This means alongside keeping a track of market changes, there are some other things you should keep on your radar in the upcoming months.

Here are three of the headliners:

Rising Interest Rates

There’s no missing it: Interest rates, like the prices of everything else, are rising.

Why? Record low interest rates during Covid-19 lockdowns sent inflation soaring above the norm, which has forced the Reserve Bank to increase the OCR in an attempt to temper the economy.

Inflation is currently 6.9%, which means it has all of a sudden skyrocketed far beyond the normal 1-3% band.

For context, the average over the last 10 years has had it sitting at a healthy 1.64%.

Here at Opes we predict that interest rates will continue to rise until inflation cools, with the 1-year fixed mortgage interest rate peaking at 5.75% in 2023. Then, once the pressure is taken off the economy, we think interest rates will level out to a 4.5% long-term average.

If you want to find out how we arrived at this conclusion, visit our interest rate predictions article.

Declining market momentum

Media headlines love a good Doomsday prediction when it comes to the peak of the housing market. In reality, the declining market momentum tends to be a lot less catastrophic. If anything, it’s a very normal part of being an investor.

The Reserve Bank predicts a total 11-15% drop in house prices before they begin to recover (Monetary Policy Statement, May 2022).

Different economists will publish their own predictions, and frequently update them. At the time of writing the consensus seems to be house prices will drop between 10% and 15%.

Bear in mind the thing is house prices are notoriously difficult to forecast. Reserve Bank Governor Adrian Orr said: “We are more confident in the direction [of decline], rather than the magnitude” (Monetary Policy Statement, February 2022).

The Reserve Bank openly admits this. Chief Economist Paul Conway said: “And can I just stress that there’s a lot of uncertainty around these forecasts, particularly around an asset price. So we’re not pretending that we have a crystal ball with respect to the housing market.”

If you want to go more in-depth, check out our ‘House Prices Are Falling … Is Now Really The Time To Buy An Investment Property?’ article.

RMA Reform

In a nutshell, National and Labour have teamed up to scrap the rules which bind single-house zoning law in our major cities.

It’s designed to mean that more properties can be built on the same amount of land as before. And ultimately that means increasing the housing supply.

So, in some areas you could potentially bowl over one house and build three in its place.

This is going to result in a lot more building in our inner-city suburbs, especially impacting: Auckland, Hamilton, Wellington, Tauranga, Christchurch and Selwyn.


Is Now A Good Time To Invest?

Here at Opes we always say: “The best time to invest in property is when you can”.

But, as an astute investor you might be thinking: “In the midst of a declining market, why don’t I just wait for property prices to fall further? Wouldn’t that mean I can get an even better deal?”

Sure, if you had a perfect crystal ball that showed exactly what’s going to happen to property prices, then it would make sense. But you don’t have a crystal ball … nobody does. Otherwise, we would have all bought 20 houses 20 years ago.

Based on Reserve Bank predictions we are almost within what we at Opes Partners call “trough territory”, where house prices are almost 10-15% below the November peak.

In which case we are moving into a period where property is being bought more cheaply than it was 6 months ago.

It’s also important to note that even if you could perfectly predict the dip, you still need to get finance for the property. The bank can stop you buying your dream asset, so it is important to invest when you can, rather than wait and potentially not be able to take advantage.

So it is best to stay engaged with the housing market so you can be ready for deals as they arise.

What we are saying is: The dip is already here. The deals are ripe and ready. So, you want to get in now.

Q: Are house prices dropping in NZ?

A: Yes, national house prices are on the decline. The Reserve Bank predicts a total of 11-15% drop in house prices before they begin to recover at the end of 2023. Currently (June, 2022) house prices have dropped 7.7% since the peak in November (REINZ House Price Index November 2021 – May 2022).

Q: What is happening to the property market?

A: As a whole, property prices are on the decline.
New REINZ data, released in June, says the property market has dropped another 1.6% in May 2022. House prices are down 7.7% from their peak in November 2021 (through to May 2022) peak in November.

Q: Is the property market slowing down?

A: Yes, property prices are declining. This is most likely a result of tight LVRs, high mortgage rates, and November’s CCCFA announcement.

Q: Will house prices crash in 2022?

A: The term “house price crash” is a bit of a misnomer, often purported through media channels. What is happening at the moment is very normal behaviour for the housing market. All stable asset classes – like shares and property – tend to go through cycles. Prices boom, peak, fall, and then recover and go through a boom again.

Q: Where is the most affordable place to buy a house in NZ?

A: Canterbury and the top of the South Island look relatively affordable compared to where we’d expect their house prices to be.

Taranaki, Northland and Auckland also appear to be at favourable parts of their property cycle.

Expect smaller price falls and quicker house price recoveries in these regions.

On the other hand, property prices in Wellington, Manawatu-Whanganui and Gisborne look overcooked.

Expect larger price falls and longer house price recoveries in these regions.

Who are Opes Partners?
Opes Partners

What is the 3-Step Opes Coaching Programme?

1. Plan out your property investment portfolio

The first step in the programme is to co-create a plan using our MyWealth Plan software. We built this software specifically to help Kiwis create a financial plan in under an hour.

You'll leave this 1-hour session with a written down plan. Pen to paper.

2. Pick properties that fit with your plan

Once you've created your plan in step #1 – your property partner will go out and find properties that fit your plan. They'll search through projects from up to 58 developers to find the best ones for you.

When you meet again, you'll review the top picks, go through the analysis, crunch the numbers together, and then decide which ones to hold with the developer.

3. Dig into the details – Confirm it's the right property for you

Once you've selected a property, you'll work for 10 days to make sure it's the right property for you. So you'll work with your Property Partner and Client Relationship Manager to dig into the details of the property.

You'll go and look at the development and be introduced to mortgage brokers, solicitors, accountants, and property managers. Their sole job is to help you figure out if this property works for you.

And you’ll have access to all the resources, tools, and data … so when confirmation day comes, you have confidence you know you’re making the right decision.

Who is the Opes Coaching Programme the right fit for?

  • You understand the concept of property investment, but who wants help putting it into practice.
  • You want a “Done for you” property investment service, so you can be a hands-off investor.
  • You are someone who has at least a 10 year investment time horizon.
  • And finally, you’re ready to become a property investor.

Who is the Opes Coaching Programme is NOT the right fit for?

  • You’re more into the smell of paint or the colour of a wall than the numbers that stand behind an investment property.
  • You only want investments that are hands-on, so you can save a few dollars here and there.
  • You have plenty of time on your hands and want to do the property investment process yourselves.
  • You’re looking for an overnight success and want to get rich quickly.

What does it cost to work with Opes Partners and go through the programme?

It’s free. Complimentary. No Cost.


The developer pays us a marketing fee when you confirm that the property is the right fit for you. Very similar to the way a mortgage broker gets paid by the bank.

Now it's important to note that we are paid the same fixed rate no matter what property you invest in.

If it’s a $500k apartment in Christchurch or a $1.3 mil 3-bedroom townhouse in Ponsonby – we get paid the same rate.

That's important because then we can recommend the right property for you, and there's no incentive to recommend you invest in a more expensive property, just so we get paid more.

I want learn more about how Opes can help me

Learn more about the Opes Coaching Programme Here


Ed McKnight

Ed McKnight is the host of the Property Academy Podcast – NZ's #1 business podcast. He is an economist, having studied at the University of Auckland and the University of Waikato. He's a frequent writer for Informed Investor Magazine and has contributed to NewsHub, Stuff, OneRoof and Property Investor Magazine.