Where house prices dropped the most in 2025 - and where they kept on climbing

1. Property values in the red in 2025

It was "more of the same" for property values in December, with the Cotality Home Value Index showing a modest monthly drop of 0.2% at the national level – and a mild annual fall of 1.0%. Across the main centres, Christchurch's median property value was up by 2.6% in 2025, and Tauranga's median property value was up by 1%. By contrast, Wellington's median property value fell by 2% and Auckland's fell by 2.6%.

Putting aside those modest regional differences, the bigger picture is that 2025 was another sluggish year for values, as was 2024 too (after the big downturn in 2022-23). This reflected conflicting forces such as the support from lower mortgage rates, but the restraining influence of a weak economy and rising unemployment.

This year, the economy looks set to perform a lot better, and hence we’ll probably see modest growth in property values too; perhaps an average of 5% nationally. But under the surface, there’ll be plenty else to keep an eye on, including the effects of debt-to-income ratio caps, electioneering (e.g. capital gains tax debates), and also how borrowers react in an environment where mortgage rates seem to have reached a floor. This could be the year of rebuilding confidence.

2. Employment starting to rise again?

After a lack of new data to ingest over the holiday period, it all kicks back into gear this week, starting with Stats NZ’s November figures on filled jobs on Wednesday. There have been tentative hints in the past couple of releases that firms may be looking at hiring activity again, so let’s hope for more of the same in the latest data. Rising employment certainly feels like a core component of getting confidence and wider economic activity back on its feet.

3. Building activity looks set to trend higher

Also on Wednesday Stats NZ will release November’s figures on the number of new dwellings consented. There’s been positive news in the construction sector over the past couple of months (after an extended downturn and lull), and there’s a good chance that November’s data will also be encouraging. A continued pipeline of new dwelling construction would obviously support economic activity but also help to keep housing affordability pressures in check.

Cotality chief economist Kelvin Davidson: "2025 was another sluggish year for values." Photo / Peter Meecham

4. Keeping an eye on inflation

With the economy turning around, the Reserve Bank now looks set to step back and judge the effects of its work over the previous 18 months or so. But there’ll still be a very close eye on inflation and the RBNZ will want to see it continuing to trend lower. On Friday this week, Stats NZ will publish December’s selected price indexes data, which is a monthly release covering nearly half of the benchmark, quarterly CPI. The caveat is that it includes some of the more volatile elements such as airfares, fuel, and food, but let’s still hope for signs of a continued slowdown. This release also covers property rents, which are already flat to falling – great for tenants, not so much for landlords.

5. About to start fixing longer again?

And then finally this week, on Friday, the Reserve Bank will publish November’s data on loan terms chosen by new borrowers. Generally speaking, floating rates or 6-12 months fixed terms have remained popular over the previous few months – and this may well have remained the case in November. But if mortgage rates have truly troughed, it’ll be fascinating to see what households do in 2026. There’s already been plenty of anecdotal evidence of people recently looking to fix longer.

- Kelvin Davidson is chief economist at property insights firm Cotality