Summarised by Centrist
New REINZ figures show a sustained decline in New Zealand home values, with June’s price index down again by 0.3% and sales turnover off by 4.8%. Inventory has ballooned to 32,700 unsold homes; a number nearly double the levels seen during the 2021 peak.
Economists are calling it a “once in a generation” crash, but for many would-be homeowners, it’s a long-awaited return to sanity.
The market has now retraced to pre-pandemic affordability levels. Mortgage repayment burdens are easing, and buyers who were locked out during the frenzy are getting a second chance. Yet the market remains sluggish, a reflection of oversupply, weak confidence, and lingering economic instability.
Author Zineb Mouhoubi notes that unlike Australia, where governments scramble to prop up demand through deposit schemes and lenient lending rules, New Zealand has held the line. No credit loosening, no taxpayer-funded buyer incentives. Mouhoubi argues that the result, being a sharper correction, delivers a cleaner reset. By refusing to interfere, the government allowed price discovery to play out.
However, ASB economists warn the downturn isn’t over yet. With high inventory and new listings still flooding in, house prices face further downward pressure.
