Three bedrooms, or four? The price gap is shrinking

The financial leap from three to four bedrooms has narrowed.
House prices overall have dropped more than 20% since their 2021 peak, but four-bedroom homes have fallen relatively further than three-bedroom properties in many areas—creating a golden opportunity for some.
The trade-up premium between three and four-bedroom houses has dropped by around 5%, or more than $32,000, in Auckland City over the last year.
Wellington City’s trade-up premium has dropped by 5.9% in the last year, while Christchurch has declined by 0.5% and Dunedin by 2.6%.

Auckland opportunity
Auckland’s median house sale price sits at around $975,000 as of May 2025, up from $761,000 10 years earlier—a 2.51% annual growth rate that’s been anything but smooth. No surprise that 2.51% is around half the average 5.44% growth rate recorded over the past 20 years.
Taking this broader view, Auckland houses are potentially attractive for long-term investors. Throw in the relatively bigger decline in four-bedroom houses, and the potential looks a bit juicier.

What does this mean for investors? CoreLogic’s Chief Property Economist Kelvin Davidson puts it perfectly: “Past experience suggests that a flat/soft property market can be a good opportunity to trade up.”

Perfect conditions for upgraders
• Lower mortgage rates
• Plenty of choice for buyers
• Asking prices are below CVs in many cases

Davidson expects property sales volumes to rise by approximately 10–15% in 2025, with national values increasing around 5%. Sales volumes in May were 16% higher than the same month last year—the 24th rise in the past 25 months. People are already cottoning on to these opportunities.

If that trend continues, the current bedroom gap compression might be your last chance to trade up on the cheap.

Though ‘cheap’ can still cost a small fortune, depending on where you intend to buy. For example, numbers crunched by property data firm Co-ality show that the step up to four bedrooms in Auckland City requires an extra $601,000—not surprising given the concentration of expensive homes in the area.

Good question
If the gap between three and four-bedroom homes is the smallest it’s been in years, and you’re planning to upgrade anyway, why wait for the market to remember what prices used to look like?
Run the numbers now: with gross rental yields sitting at their highest level since early 2016—at 3.9%—that extra bedroom could make a real difference.

Check out our listings to see what’s on offer. Still mulling the numbers? Call 0800 GOODWINS to discuss rental prices and likely yields.