The five things you need to know about the housing market this week.
1. Still pain for resellers but gain for buyers
The Cotality Pain & Gain Report for Q2 showed a continuation of the recent softer results for sellers, but of course that’s great news for buyers. Around 13% of property resales in the three months to June got a price less than the owner originally paid, which was the highest figure since late 2012. That’s fully consistent with the ongoing sluggishness of property values.
That said, this still equates to 87% of sellers making a gross profit. Meanwhile, this has been a slow adjustment rather than the sharp drop in the pain & gain results that we saw after the GFC. Arguably stronger credit controls this time around, as well as the resilience of employment, have probably played a role here in limiting the number of people who are “motivated sellers”.
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As always, hold period is vital too – the median profit-maker had owned for more than 10 years on the Q2 results, versus loss-makers at around four years. Buying and selling again in such a short period of time is always a little fraught, but even more so in the market we’ve seen since 2021.
2. Sales continue to drift lower
Just to illustrate the sluggishness of the market, we recorded a 6% drop in sales activity in July compared to the same month last year, when measured across agent deals and private sales. That was the seventh drop in a row, or in other words, we’ve not seen a rise yet for any month in 2026. This also means the annual running total for sales now stands at 89,385, which is decent in a long-term context, but still down from 91,411 at the mini-peak in December last year. Overall, the housing market mood remains cautious, and this is seeing activity slow.
3. First-home buyers are cashing in
Of course, there are always silver linings, and these are really favourable conditions for first-home buyers. Indeed, the Cotality Buyer Classification figures showed a new record market share for first-home buyers of 29% in July. They are capitalising on lower house prices, but also plenty of listings/choice, access to KiwiSaver, and the abundance of low-deposit finance available at the banks.
Cotality chief economist Kelvin Davidson: “Buying and selling again in such a short period of time is always a little fraught.” Photo / Peter Meecham
There has also been something of a bounce-back for mortgaged multiple property owners in the most recent month or two as well, after a drift lower from November to May. There are still challenges for investors (such as subdued rents), and anecdotally the election and possibly higher property taxes next year are also weighing on some investors’ minds too. Given this, it’s hard to imagine a fresh investor boom, but it’s one to watch.
4. Net migration is just ticking along
In seasonally adjusted terms, we got 1610 net new migrants in June, with NZ citizens still leaving (in net terms) but being outweighed to some extent by new arrivals of non-citizens. The annual running total for net migration is currently 17,624, up from August’s trough of 9503 and a 17-month high, but still well below a more typical figure of around 30,000 or so. In other words, migration is just ticking over really, not pushing or pulling the economy/consumer spending and the housing market in any particular direction.
5. Inflation is back on the radar
A quick look ahead, on Monday this week we’ll get the July selected price indexes data from Stats NZ. Inflation remains public enemy #1 at the moment, and unfortunately these figures may not provide much respite given continued pressure on fuel prices.
- Kelvin Davidson is chief economist at property insights firm Cotality
