PHOTO: The property market “recovery” might take up to 7 years – and even then, your home may still be worth less in real terms. FILE
📊 The Recovery That Isn’t: Prices May Never Fully Bounce Back
If you’re waiting for house prices to “bounce back,” don’t hold your breath.
According to a bombshell new forecast from Infometrics chief economist Gareth Kiernan, real house prices (adjusted for inflation) are expected to remain 20% below the 2021 peak well into the 2030s.
And that’s not just market noise. It’s worse than the global financial crisis (GFC) when house prices dipped 14% in real terms — though not as extreme as the 1970s crash, which saw a 38% real-terms drop.
What Real Estate Agents Won’t Tell You – But the Stats Will | WATCH
📈 Nominal Growth? Sure. But Inflation Is the Silent Killer
Cotality (formerly CoreLogic NZ) data shows:
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House prices have risen just 0.5% year to date
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Values are still 16% below their 2021 peak
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Even with 3.1% average annual growth, prices won’t hit their nominal 2021 peak until mid-2029
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In real terms, they’ll still be down 20% in the 2030s
That means that inflation is quietly eroding your home’s real value – even while headline prices inch upward.
⏳ “It Could Take Seven Years to Recover” – And That’s Being Optimistic
Cotality’s chief property economist Kelvin Davidson says if house prices only grow 2–3% annually, the market could take 5–6 more years to recover in nominal terms, and longer in real value.
“There’s always been a chance this time that it would be slower… it’s already a 3.5-year cycle, and we may see another 3.5 years to get back,” Davidson said.
For context, post-GFC recovery took 5 years — this cycle could last 7+ years.
🏠 Listings High, Sentiment Low: Buyers Remain Cautious
Despite falling interest rates and rising listings, buyer sentiment remains cautious:
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Debt-to-income (DTI) limits
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Loan-to-value restrictions (LVR)
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Labour market uncertainty
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High cost-of-living pressures
“It’s a more prolonged and deeper downturn,” says Davidson. “There are more headwinds in play this time.”
Even banks are hedging their bets:
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ANZ forecasts just 0.5% monthly growth for the rest of 2025.
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Westpac still projects 6% annual growth – but admits the latest data “wasn’t as strong as expected”.
😬 Sellers Struggle, Buyers Wait — and Everyone Feels Stuck
Davidson also noted that stock levels remain high, which is keeping prices from climbing sharply.
For sellers, that means fewer offers and more price pressure.
For buyers, it means more choice and better value – especially in an environment where wage growth and inflation continue to bite.
“It might not be the worst thing to have a period of readjustment,” Davidson said.
https://www.propertynoise.co.nz/why-you-need-some-fergs-coffee-in-your-life/
🔮 What This Means for You
📉 For Sellers:
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Don’t expect 2021 prices again any time soon – if ever.
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Price realistically and prepare for a longer time on the market.
💸 For Buyers:
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The market is in your favour — but still tread carefully.
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Prices are falling slowly in real terms, so time is on your side.
🧠 For Investors:
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Look beyond capital gains. Cashflow, yield, and long-term fundamentals matter more now than ever.
🧾 Final Word: This Isn’t Just a Slowdown – It’s a Reset
New Zealand’s housing market is undergoing a multi-year correction, not a quick dip. Inflation is making sure of that.
Anyone still talking about a “bounce-back” may be living in 2021 – not the real world of 2025 and beyond.