New Zealand housing wealth tops NZD $1.66 trillion

New Zealand's residential property market was worth NZD $1.66 trillion in June 2024, spanning 1.74 million dwellings.

The figure highlights the weight of housing on household balance sheets, even as prices and sales remain weak across much of the country.

Data from property analytics group Cotality shows residential real estate accounts for 48% of household assets. That compares with NZD $345 billion in commercial real estate, NZD $252 billion in NZ Super and KiwiSaver, and NZD $190 billion in listed stocks.

Outstanding mortgage debt totals NZD $404 billion. Over the past 12 months, NZD $78.1 billion of residential property changed hands across 87,920 sales.

Subdued market

Despite the market's scale, housing conditions remained soft through September. National property values fell 1.3% over the year to September and were also down 1.3% over the three months to September.

Nationwide values remain more than 18% below their previous peak, according to the data. Sales activity also stayed under pressure, with 6,519 property transactions recorded in September, about 14% fewer than in the same month a year earlier.

The drop was the ninth consecutive year-on-year fall in monthly transactions. High stock levels continued to favour buyers in price negotiations.

Kelvin Davidson, Chief Property Economist at Cotality, said the size of the sector should not be mistaken for market strength.

"Residential property remains an enormous part of New Zealand's household wealth, which puts the significance of even relatively small shifts in the housing market into perspective.

"But scale shouldn't be confused with momentum. The market remains subdued, with buyers and sellers still cautious, sales activity soft, and property values continuing to edge lower.

"There's still plenty of choice for buyers, which is giving them negotiating power. At the same time, most vendors aren't being forced to sell, and that's helping to contain the rate of decline in property values."

Regional split

National figures masked wide divergence between regions and main urban centres. Auckland property values were down 3.2% over the year to September, while Christchurch posted annual growth of 3.4%.

The variation points to a market moving at different speeds depending on location, supply, and local demand. Some centres have absorbed weaker buyer activity better than others.

"There's no single story across New Zealand at present. Some markets are proving more resilient while others remain under greater pressure, but nationally we're still seeing a fairly subdued picture," Davidson said.

Rates pressure

Mortgage pricing has also started to move higher. One-year and two-year special fixed mortgage rates stood at 4.97% and 5.27% respectively in September, compared with an average rate of 4.80% currently being paid on existing fixed mortgages.

That gap suggests some borrowers coming off older fixed terms may face higher repayments, adding another constraint on housing demand. At the same time, elevated stock levels have reduced urgency among buyers and left sellers competing harder for attention.

Cotality's figures indicate that while housing remains the dominant store of household wealth in New Zealand, transaction activity and price movements do not yet point to a broad recovery. Softer sales, falling national values, and uneven regional performance have left the market in a holding pattern.

"For now, the market looks more like a period of consolidation than the beginning of another significant upswing. Housing remains an extraordinarily important store of New Zealand household wealth, but the conditions for renewed momentum aren't yet firmly in place," Davidson said.