The Real Estate Institute said the housing market appears to be stabilising, but that stability remains fragile, with uncertainty around the upcoming election and escalating tensions in Iran potentially weighing on sentiment and keeping both investors and first-home buyers cautious.
It has reported that the national median sale price rose 1.3% in May to $775,000, though sales volumes fell sharply, down 12.6% compared to the same period last year. The institute noted that last year’s figures were boosted by a more favourable backdrop, including interest rate cuts from the Reserve Bank, which helped drive stronger buyer demand and market momentum that is no longer present.
The house price index, which provides a more stable view of underlying market trends by stripping out distortions from changes in the types of properties being sold, continues to show weakness in the housing market.
The latest figures indicate prices are still under pressure, with the index down 0.6% over the past year and falling 1.7% over the last three months.
The institute said ongoing cost-of-living pressures, combined with uncertainty ahead of November’s election, were continuing to weigh on buyer confidence and broader housing market sentiment.
It said real estate agents were reporting that household budget pressures remain a key factor for buyers, with many people becoming more cautious, selective, and slower to commit to purchases amid tighter financial conditions.
However, the institute noted that conditions are not uniform across the country. In some regions, stronger commodity prices, relatively more affordable housing, and continued migration away from major centres are helping to support demand.
Record median prices were recorded in Canterbury and Southland.
Northland recorded a 3.9% year-on-year increase to a median price of $660,000, while Taranaki rose 2.9% to $602,000. Auckland also edged higher, up 2.6% to a median of $1.005 million.
Nationally, prices are 16.2% below their last peak. The downturn is more pronounced in the main centres, with Auckland down 23.4% and Wellington down 27.7%. Canterbury is almost back to its previous high, sitting just 1.1% below peak levels .