There are signs the housing market may be on track for growth next year, but economists say home owners keen for an uptick shouldn’t expect a “boom”. 

New statistics from property data firm Cotality, formerly CoreLogic, reveal a majority of suburbs across New Zealand saw prices for standalone houses drop in the three months to September. 

While 56% of suburbs saw standalone house prices decline, two-thirds of those experienced a drop of less than 1%. The remaining 44% of suburbs saw values rise or remain flat. 

“There’s clearly still patchiness in the market, but this fits with the overall picture that national median values have drifted slightly lower in recent months,” Cotality New Zealand chief property economist Kelvin Davidson said. 

“Overall, property values remain sluggish for now, but conditions may be turning towards some growth in 2026, albeit likely muted.” 

Suburbs where prices rose were more “affordable areas”, Cotality’s data showed. The strongest gains, of more than 5%, were seen in parts of the Grey District, Buller and south Taranaki. 

Declines of nearly 4% were seen in the Auckland suburbs of Takapuna and Clevedon. 

“While it’s difficult to generalise across the various trends at a suburb level, there is certainly some resilience among standalone houses and townhouses in lower-priced areas, which will tend to have affordability on their side,” Davidson said. 

Davidson said the trend of slowly rising sales activity with stagnant property values was shaped by ongoing economic and labour market weaknesses. 

He said a strong lift in prices in the near term was hard to see. However, he said there were some signs conditions were shifting. 

“With affordability returning back closer to normal levels, listing volumes starting to decline, mortgage-rate falls increasingly passing through to existing borrowers as they reprice on to lower rates, and the unemployment rate set to fall a bit next year, conditions seem to be building for modest house price growth in 2026 – but don’t expect a boom," Davidson said. 

Infometrics chief economist Brad Olsen agreed with Davidson. He told the Herald the talk is about modest growth. 

“There likely is a little bit of growth to come through,” Olsen said. “There hasn’t been much of a reaction to interest rate cuts and with slow population growth coupled with high levels of housing stock available. 

“But with further interest rates scheduled between now and the end of the year, it lays the groundwork for some slightly stronger growth coming next year, but we certainly wouldn’t overblow it.” 

ANZ senior economist Matthew Galt told the Herald the bank was forecasting a “gradual pick-up” in house prices next year. 

“We’re forecasting house prices to end 2025 the same way they ended 2024, so no growth, and then a gradual pick-up as interest rates start supporting the market,” Galt said. 

“We don’t expect house prices to race away – for much the same reasons they’ve been flat this year; the Reserve Bank has only just cut [the Official Cash Rate] back to neutral from high levels, and another factor is that rates and insurance costs have been going up while rent has been going down.” 

Raphael Franks is an Auckland-based reporter who covers business, breaking news and local stories from Tāmaki Makaurau. He joined the Herald as a Te Rito cadet in 2022.