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Chapter 1: What recent trends are emerging in the New Zealand housing market?
it was sort of a so-called good increase in the unemployment rate.
Kia ora, and welcome to the New Zealand Property Market Podcast, brought to you by Cotality for the 9th of February, 2026. I'm Head of Research, Nick Goodall, and today I'm joined as per usual by Chief Economist, Kelvin Davidson. Kelvin, two pretty important releases last week, and we'll talk about those intriguing labour market stats shortly.
But first, we have the first month's result for the housing market out with the Cotality Home Value Index for January now published.
what did it tell us mate and uh you're not allowed to use the term more of the same uh okay yep no well uh fairly flat um yeah i mean a continuation of recent trends whatever you want to call it um yeah minus 0.1 on the month uh yeah just a relatively flat result as i say now regional variability of course and that's been something that's been in play for a while too but Yeah.
I mean, we saw, we saw that minus one minus 0.1%, I should say at the national level, um, that's on the month, uh, down, I think it was 1% year on year. So, so yeah, kind of treading water, whatever phrase you want to use without what you just said, um, Auckland down minus 0.3%.
So it's, you know, been, been underperforming, I guess the rest of the country, um, good for buyers, of course, you know, not, not so great if you're trying to be a seller. Um, And yeah, Christchurch was flat. I mean, other markets like to need an up slightly. So, you know, you've still got that regional variability going on. And we've we've talked about that for a while, too, in terms of
You know, economic drivers, the fact that perhaps services sector is underperforming a little bit, that's kind of weighing on a market like Auckland, as well as the contrast with, say, farming sector going pretty well, that seems to be supporting maybe so-called provincial areas. And one market I didn't mention there was Invercargill still going up at a,
Well, it's not booming, but at a slightly faster rate than elsewhere. And you'd think that would fit with affordability, but as well as that farming sector going pretty well. So yeah, not the phrase you use, but sort of tracking sideways to a large extent.
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Chapter 2: How does the latest unemployment rate affect the housing market?
And it'll be disappointing for some, of course, and great for others. And of course, it's a good market for first home buyers at the moment. So always two sides of the coin in the housing market. I guess another thing we obviously can do through the HVI is to look at property types. Townhouses, I should say, standalone houses only, in air quotes, down minus 0.7% in the year to January.
So, you know, that's kind of tracking sideways. Townhouses down 1.7% and apartments down 4.1%. So, you know, there's regional variability. There's also a bit of variability there by property type as well. Now, apartments are only about 4% of our housing stock and a lot of that's, you know, pretty much in central Auckland and central Wellington. So it is really...
sort of a niche segment, if you like, and isn't geographically spread. But yeah, perhaps a wee bit more weakness there for apartments. Not 100% sure why, but we can definitely speculate about possible reasons. And, you know, I've heard anecdotally some concerns about, you know, build quality on some of these projects, you know, people worried about
buying an apartment and having some leaky home issues down the track. Not that that's going to apply everywhere, but that does seem to be a concern for some people. Body corporate fees going up, insurance fees going up, of course. And maybe the lack of net migration at the moment that would students, that sort of thing, potentially
reduce the appetite to invest in apartments because you'll see investors tend to perhaps buy apartments a bit more often than owner-occupiers. So maybe there's a few concerns there from the investment community about apartments. So maybe just keeping a bit more of a lid on prices there. So yeah, a bit of variability by region, a bit of variability by property type. But when you add it all up,
relatively flat. So I got asked by a journalist last week sort of when do we start to see house prices rise a bit more significantly, if we do.
I mean, I found myself saying, well, it could be a few months, yeah, so, you know, maybe the headlines got carried a wee bit away, but the tone of the headline was pretty much, you know, wait till the second half of the year, which I can't remember if I exactly said or not, but, yeah, it's not hard to imagine that if you think about where we've been over the last few months kind of tracking sideways, and, yep,
interest rates are generally down but you know people starting to worry a little bit more now about small increases on some of those terms you know labor market which we'll talk about is not exactly sort of roaring away some economic indicators looking better others not quite so not quite so strong so yeah you know it could be that we we don't see a lot of growth in house prices for a few months yet whether it's the second half of the year or you know towards the tail end of the first half not not sure but yeah it does just feel like there's um you know maybe a little bit of
a little bit of a flat patch to keep working through, I guess. So yeah, hopefully that wraps it up.
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Chapter 3: What regional variabilities are observed in property performance?
But off the back of you referencing the difference between the property types nationwide, also the question around, well, how does that look for Auckland? Particularly because I suppose it's got a broader range of different types of property types there, more apartments as well.
And so interesting, when you look at that 12 months, so it is the end of January last year to the end of January this year, Apartments were down 5.3%.
And I think just to reiterate all your points, right, yeah, that demand from the new migrants coming to the country, which are likely to live in those places, if demand is down for being a tenant of those properties, then surely the landlords that own that, they're seeing less growth in rent, maybe even declining. They're not feeling the same expectation on capital growth.
And we know that apartments don't grow through that growth. As much as houses do anyway. So yeah, it's probably just shows that that, you know, expectation on apartments is even worse. And so yeah, when someone's being sold, now they're not achieving the same price. And so the value, the change has actually been more than 5% down in Auckland for apartments.
flats or townhouses down 3.2% so a little bit less houses actually down 2.4% in Auckland as well over that 12 month period so you know that's actually you know more than just flat for Auckland I would say it's actually been down a couple of percent houses performing slightly better than townhouses and flats which probably backs up some of the anecdotes we heard recently too that there's been you know with that increase in the number of townhouses being built that they're maybe not performing quite as well and
There's slightly more discount when all those are selling because they're staying on the market longer and the demand has reduced for those types of properties, a bit more than for houses where you still get your land and whatnot as well. So yeah, look, it was just some useful extra data points, I think, to reference.
In terms of the things that jumped out to me, Dunedin, I noticed, was up 0.1% over the last 12 months. So again, it's flat. But turning into the positive for me was worthwhile acknowledging that Dunedin at least jumped into that positive range. number over that 12-month period, even if it is only just, and could well change again, of course, in the next month or two.
So don't want to get carried away, but I did stick out for those main centres that it sort of turned positive. I know Christchurch has done so already, but Dunedin jumped into that bracket too. From an overall perspective in the last 12 months, you touched on Invercargill there, and it has become a lot more of a common story recently, but yeah, up 5.5% over the last 12 months.
And for those that listened to our Decoding 2026 report, of course, at Podcasts, We did have an Invercargill agent there who talked a lot about the strength of the market down in Invercargill. So, yeah, just firmly backed up again by the January data here. Tairawhiti, Gisborne, of course, up 3.8% too.
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Chapter 4: What insights does the Cotality Home Value Index provide for January 2026?
So decent growth in that market in the last 12 months. On the flip side, Kapiti down 4%. So off the sort of Wellington market, that Kapiti in the last 12 months hasn't been going the best.
um i spent some time up there over the weekend which we'll chat about uh at the end of course and but yeah interesting to see that one not performing quite as well and and maybe some of that you know improvement that we'd seen um in some of those areas that you know off the back of transmission gully over the last few years of course hasn't been sustained and and maybe it just shows that values are still a bit bit overvalued in some of the parts of the coast so certainly north of wellington there anyway so those are the things that jumped out at me um
Anything more, Kelvin, that I've touched on there? Or do you want to push back on me not allowing you to say more of the same? No, that's fine.
Not much more to be said. I guess people will just be thinking about where it goes next and that trade-off between lower interest rates, but maybe still a slight bit of economic caution out there.
know watching the labor market seeing the unemployment rate go up in the fourth quarter so there's going to be yeah conflicting forces i mean we had that phrase last year it's it's maybe carried over into the first month of this year might carry on for a little bit a little bit longer yet and there's this wider point i guess we've we've been talking about in terms of um well you know it's not necessarily the worst thing if house prices are flat for a long period of time it's you know not so good if you're trying to be a seller or you want to see some capital gains on property your own but
Good for buyers, of course. So, yeah, I think this is just a market where buyers still have a window of opportunity, I suppose. And we're seeing it in our buyer classification data. First-time buyers still staying really strong. So, yeah, good news story in amongst all of that.
Yeah, no, for sure. No, well said. All good, mate. Then let's look at the economy and labour market release for Q4 in particular. Of course, the headline was that unemployment rate increased to 5.4% from 5.3% in Q3.
bit of a surprise even for the economists that update their forecasts more frequently than the reserve bank they still surprise them too though as per usual with these numbers you have to look a little bit beyond the headline to get the real true detail of how this labor market is performing try to take us um through that detail and i guess your overall read on you know how bad this is or it's not so bad and maybe at the end we'll get to the implications for
the official cash rate in particular, how the Reserve Bank might read this. Of course, they're meeting in, what's that, about nine days' time, 18th of February, next Wednesday, to decide the OCR issue the next monetary policy statement. So, yeah, we'll get to that shortly. But, yeah, first the figures on the labour market, Kelvin.
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Chapter 5: How do different property types compare in terms of market performance?
More importantly, I think, yeah, the conversation in the last two weeks since we got that high CPI inflation rate that led to people going, well, they're going to have to drift the OCR back up again. You need to stop it being so stimulatory. I think this kind of does...
go back towards the other side of those economists who are saying, jumping the gun, bringing these OCR increases forward further into 2026, the economy is still struggling a little bit, labour market's still not going great, you know, just tie-ho on that a little bit and let this play out a little bit longer and you can keep the OCR a bit more stimulatory for a little bit longer than having to get it back to what everyone seems to see as the neutral rate around about 3%, which we're obviously 75 basis points away from.
So, That, to me, is where I sit off the back of this, that it does show that there's still some weakness out there. There's definitely no rush to get this OCR travelling back upwards, even though we had that inflationary figure outside the band, of course. The expectation is still for inflation to come down. Yes, unemployment should also come down as well.
The economy should start to grow, but it's not like those, even the more recent data or the faster moving data is showing signs of this storming away. It's still a little bit of mixed results coming through, showing that, yeah, we've got to stay where we are for a little bit longer. So that's kind of where I sit.
I'm keen just to do a bit more of a look at where interest rates are at and how much are they moving up or down or sideways and what are banks doing at the moment? How are they pricing in the six or 12 months and how much is this more recent data influencing that? So perhaps we can look at that over the next couple of weeks and time that maybe off the back of the OCR.
I'm not sure, but yeah, I think that'll be the interesting thing now just to see how they're pricing in this and what genuine chance have we got of the OCR
increasing this year um later on this year you know there's only going to be 25 basis points all those sorts of things and what does that track look like and maybe it's off the back of next wednesday when there's a bank update forecast as well which is much of it's a single to market it's a it's a pretty decent expectation so yeah i think we'll sort of wait for that one um but yeah likewise like you said wage growth not hugely there if we're not earning heaps more we're not spending heaps more that's not going to push inflation up so i think those signs for inflation to
just slow down as well are not bad. So yeah, that's kind of my take on it. Anything else from that sort of labour market economic perspective that you want to touch on before we take a look ahead at this week and what's going on before a quick roundup of the long weekend for ourselves?
Yeah, just two really quick things. I think, now this might have been reversed afterwards, but I think in the aftermath of those labour market numbers, sort of wholesale swap rates came down a little bit. So, you know, the markets interpreted those numbers as sort of a little bit more downbeat than what they're anticipating. So those reactionary swap rates, I think, did fall a bit.
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