New Zealand Housing Market Plunges to Three-Year Low Amid Interest Rate Hikes

New Zealand's housing market has entered its longest and deepest 'down phase' in at least three decades, according to property consultancy Cotality. House prices have fallen to a three-year low, extending a slump that began in early 2022.

Prices dropped by 0.3% in July from June, and are now the lowest since July 2023, with a total decline of 18% from their January 2022 peak, Cotality said on August 1. The Reserve Bank of New Zealand raised its official cash rate last month to counter emerging inflation pressures, which will put more pressure on the property market.

'This broad 'down phase' for the property market is the longest and deepest we've had for at least 30 to 40 years,' said Kelvin Davidson, chief property economist at Cotality. He added that the major downturn occurred in 2022 and 2023, and it's been a 'soggy picture' ever since.