CoreLogic has released their end-of-year property overview and it makes for fascinating reading.

CoreLogic New Zealand’s chief property economist Kelvin Davidson said this year’s report painted a nuanced picture of a market in flux after early optimism gave way to renewed price declines and slower activity.

“After an initial lift in values early in the year, driven by sentiment following the late-2023 election, property prices quickly resumed their decline as unemployment rose and interest rate cuts were delayed,” he said.

The CoreLogic hedonic Home Value Index (HVI) shows national property values have declined 5 per cent since February, with Auckland and Wellington particularly hard-hit, while Christchurch and Dunedin proved more resilient.

And property investors have been kept on the sidelines, with high interest rates and low yields making the numbers look less appealing.

Here’s a snapshot of how property has performed across the country.

Life of luxury

Herne Bay retained its position as the country’s most expensive suburb, with a median value of $3.36 million as Auckland accounted for nine of the top 10 high-value suburbs. Saint Marys Bay ($2.76 million) and Remuera ($2.45 million) were second and third respectively. Arrowtown was the only suburb outside Auckland to make the top 10, ranking fifth with a median value of $2.39 million.

The country’s highest transaction of the year was the $21.8 million sale of 84 Paritai Drive, Orakei. The remaining nine in the top 10 sales were all in Auckland too.

Regional growth centres stand out

Blaketown (Grey) recorded the strongest annual median value growth rate at 16.7 per cent, while Kaikoura (12.8 per cent) and Cobden (Grey) (12.8 per cent) also demonstrated robust performance. Over a five-year period, Cobden’s median value increased 108.8 per cent.

Rental yields highest in the regions

Mataura (Southland) delivered the highest gross rental yield at 10.8 per cent, based on advertised rents and the values of those properties rented out. Next was Wellington Central which has a gross rental yield of 9.2 per cent. In contrast, Whitford (Auckland) recorded the lowest rental yield of 1.2 per cent, reflecting subdued rental returns in higher-value areas.

Diverging market activity

Wallacetown (Southland) had the fastest-moving market, with properties selling in seven days, likely reflecting strong demand and limited supply. At the other extreme, Waimate recorded a median of 83 days on market, highlighting slower activity in some rural areas.

Challenges in declining suburbs

Auckland Central experienced the most significant five-year median value decline (-9.1 per cent), while Mataura (Gore) led the annual decline rate at -10 per cent. These figures underscore the challenges faced by some areas in maintaining property value amidst broader market fluctuations.

Cautious optimism ahead

With inflation now under control and mortgage rates falling, Davidson is cautiously optimistic about 2025 suggesting the country is set for a period of modest recovery.

He estimates conditions could lead to a 10 per cent rise in sales volumes and potential uptick in property values of around 5 per cent over the year, however Davidson warned values will remain well below the post-COVID peak, partly due to the dampening pressure caused by a build-up of listings.

"Affordability has improved compared to recent years, but the lingering effects of high listings and economic uncertainty might mean an uneven recovery for the property market. While 2025 brings some positive sentiment, it’s unlikely to deliver sharp gains, with a steadier path ahead for buyers and sellers alike," he said.

“There are further risks to the market include rising unemployment, which is expected to peak mid-year, and the introduction of debt-to-income (DTI) restrictions, which could limit borrowing capacity for some.

“Investors may find opportunities as lower interest rates improve cashflow conditions, though access to finance could remain a key hurdle for some.

“Overall, 2025 could be a year of conflicting forces for the property market, with some factors more supportive, and others still challenging,” Davidson concluded.

2024: property highlights (and lowlights) for investors

• Most affordable suburb: Murupara’s (Whakatane) median dwelling of $191,600 makes it the most affordable suburb in the country.
• Highest rent change: Median rents in Nukuhau (Taupo) increased 27.7 per cent over the year as Kawerau tenants experienced a -9.1 per cent fall in median rents.
• Highest rental yield: Mataura (Southland) delivered a gross rental yield of 10.8 per cent followed by Wellington Central at 9.2 per cent.
• Days on market: Wallacetown (Southland) properties sold in seven days, while Waimate recorded the slowest median sales rate, averaging 83 days.
• Weakest markets: Mataura (Gore) experienced an annual drop in median value of -10 per cent, while Auckland Central recorded decline in value of -9.1 per cent over the past five years.