Despite subdued market conditions, buyer optimism is holding surprisingly firm.

The latest ASB Housing Confidence Survey shows a net 26% of Kiwis believe it’s a good time to buy – down just marginally from 28% last quarter.

Meanwhile, the actual market is a different story. The nationwide average property value slipped 1.2% in the three months to the end of August to $957,000 – exactly where it was a year ago and two years ago.

ASB chief economist Nick Tuffley said the July quarter’s results reflect a market caught between opportunity and caution. “Lower interest rates and stabilising house prices are helping, but weak demand and job insecurity are keeping the recovery in check,” he said.

Confidence in Auckland values is not so solid

Auckland property players aren’t as confident as Kiwis generally, with a net 14% expecting gains, compared to 33% previously.

The sentiment could be a factor in falling property values – Auckland’s average property value fell by almost 3% (-$36,000) to $1.26 million in the latest quarter, a level last seen in January 2020.

  • Meadowbank, the country’s biggest loser, saw average property values fall 7.1% (-$120,000) to $1.56m – almost half a million dollars below its peak of $2.03m.

  • Other prestige areas feeling the pinch include Point England, Kingsland, Mount Albert, Te Atatū Peninsula, and Northcote.

  • Only 35 Auckland suburbs recorded quarterly value growth, with the biggest lifts in coastal areas popular with wealthy second-home buyers, such as Omaha (up 4.1% to a new peak of $3.01m).

Forecasting failures

Remember all those predictions at the start of 2025? Some in the forecasting game projected median house price rises of 6.8% by the end of 2025. Instead, we got stagnation with a side of regional chaos. Now ANZ has trimmed its 2025 house price inflation forecast from 2.5% to around zero.

And then go back to April 2020. ANZ forecasted a 15% drop in house prices, while Kiwibank expected a 10–20% dip. Instead, prices increased by almost double that amount. The old joke springs to mind: economists have successfully predicted nine of the last five recessions.

Million-dollar question

So, is now a good time to buy? More than a quarter of Kiwis think so. This might be the best buyer’s market we will see for a while. Here’s why:

  • Housing affordability in New Zealand is at its most favourable level since pre-COVID-19, according to Covalty NZ’s Housing Affordability Report.

  • In Auckland, the number of suburbs with an average property value of less than $1m has jumped from 15 during the market peak to 52 now. Auckland has a value-to-income ratio of 7.9, the lowest figure in a decade for the city.

  • The market is providing that rare commodity – time. As realestate.co.nz CEO Sarah Wood puts it: “Visit 50 properties before you buy. You need to know the market, know what’s selling, and know what buyers are paying – and right now, you have the time to do exactly that.”

  • Well-priced homes are still moving, and selling in a stable market can actually benefit vendors, who can then negotiate strongly on their next purchase.

Buyer confidence is, for the most part, holding firm because the fundamentals make sense: interest rates are falling, prices are stabilising, and there’s time to make informed decisions. Right now, informed buyers with realistic expectations are finding that the market is surprisingly accommodating.

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