The July figures reveal that seasonally adjusted sales numbers fell nationally, while the House Price Index (HPI) slipped 0.4 per cent from June. However, it remained 0.1 per cent higher than the same time last year.
Auckland’s housing market underperformed the national trend, with the HPI down 1.8 per cent on the month and 0.1 per cent on the year. Papakura recorded one of the largest annual declines at 5.2 per cent. Other regions such as New Plymouth and Invercargill saw notable gains of 4.9 per cent and 7.8 per cent respectively.
Economists say the data reinforces the sense that the economy hit a slowdown midway through 2025. Weaker labour market conditions, cooling wage growth, and persistent cost of living pressures—particularly from food prices—are placing additional strain on household budgets. This pressure is dampening demand across various sectors, including housing.
Some forecasters are already revisiting their price projections. Earlier expectations for a 2.5 per cent rise in national house prices by the end of 2025 are now seen as potentially optimistic. Analysts suggest that further cuts to the Official Cash Rate (OCR) will be needed to bolster economic activity and stabilise inflation. A gradual recovery in the housing market is anticipated once interest rates move lower, but prices are not expected to surge.
Westpac economists describe the market as unusually balanced. Lower mortgage rates have lifted activity compared with last year, yet the boost in demand is being met by a steady flow of new listings. This equilibrium is limiting upward pressure on prices. In July, seasonally adjusted house sales dropped 2.5 per cent, marking the third consecutive monthly decline. On an annual basis, sales were still up 4 per cent, but economists caution that year-on-year growth will appear less striking in coming months due to stronger comparisons.
The HPI fell 0.5 per cent nationally in July once adjusted for seasonal factors, with Auckland recording a 1.2 per cent decline. The South Island, by contrast, has generally outperformed, with certain regions still experiencing steady value gains.
Overall, the July figures point to a housing market that is losing some of the modest momentum gained earlier in the year. While lower borrowing costs could help stabilise conditions, the near-term outlook is expected to remain subdued as households contend with economic headwinds. A sustained recovery may depend on a combination of falling interest rates, easing living costs, and renewed consumer confidence.
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