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In this episode of the New Zealand Property Market Podcast, Nick Goodall and Kelvin Davidson tackle the persistent slowdown in property transactions as September sales volumes reveal a clear downward trend. With nine consecutive months of year-on-year declines, the buyers hold the pricing power, but high mortgage test rates and economic caution are keeping active participants on the sidelines.

We also dive into the macroeconomic landscape, previewing the upcoming Q3 Consumer Price Index (CPI) inflation data and discussing what the Selected Price Indexes mean for the Reserve Bank of New Zealand’s next Official Cash Rate (OCR) decision. To wrap things up on a high note, Nick shares his excitement (and frantic travel plans) for Northland’s historic NPC final appearance in Ōtautahi (Christchurch)!

• Read the 10-Year Growth Analysis: https://www.cotality.com/nz/insights/articles/nz-housing-market-may-be-entering-a-new-era-of-lower-price-growth
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Sign up for news and insights or contact on LinkedIn, X @NickGoodall_CL or @KDavidson_CL and email ngoodall@cotality.com or kdavidson@cotality.com

This podcast is for educational and entertainment purposes only and does not constitute financial, legal, or tax advice. The hosts are not licensed Financial Advice Providers in New Zealand. All information is of a general nature and does not take into account your personal situation or goals. Please consult a qualified professional before making any financial decisions.

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Residential building costs have surged to their highest annual growth rate in three years, rising 4.8% over the last year. But with existing house prices flat to falling and listings at abundant levels, can the construction sector continue to absorb these mounting cost pressures?

This week on the New Zealand Property Market Podcast, Head of Research Nick Goodall and a refreshed Chief Economist Kelvin Davidson (back from Hanmer Springs) dissect the newly released Q3 Cordell Construction Cost Index (CCCI). They discuss why builders are shifting away from absorbing cost surcharges under fixed-price contracts, and how this sudden price pass-through could trigger a shift where buyers substitute new builds in favour of existing properties.

The team also dives into the latest Reserve Bank of New Zealand (RBNZ) lending data, highlighting a noticaeble shift in borrower behaviour: one-year fixed mortgage rates have inceased in popularity from roughly 20% four months ago to 30% of new lending, taking market share away from three-year terms. They discuss why pricing dynamics - including one-year specials below 5.0% - and a desire for cash-flow flexibility are driving this shift.

Finally, they explore why the 4.8% construction inflation rate places further upward pressure on the upcoming Q3 CPI release, increasing the likelihood of another RBNZ rate hike.

This week we discuss:

• Q3 CCCI Breakdown: Why building costs rose 4.8% (above the 4.1% general inflation rate) and why this represents the fastest acceleration since mid-2023.
• Cost Pass-Through & Buyer Substitution: The risk that rising new-build pricing drives buyers back to the flat-to-falling existing housing stock.
• The One-Year Rate Surge: Why one-year fixed rates have increased to 30% of all new lending, while three-year terms have diminished in their appeal.
• The RBNZ OCR Path: Why the resilient construction pipeline and rising shipping costs are raising the probability of a October OCR increase.
• Bledisloe & Hanmer Springs Catch-ups: Nick's trip to the All Blacks experience and holding the actual Bledisloe Cup, the All Blacks’ Test masterclass, Kelvin’s forest drives in Hanmer Springs, and Bathurst drama.

🔗 Read the full Q3 Cordell Construction Cost Index (CCCI) Report: https://www.cotality.com/nz/insights/articles/nz-home-building-costs-rise-at-fastest-pace-since-2022

Sign up for news and insights or contact on LinkedIn, X @NickGoodall_CL or @KDavidson_CL and email ngoodall@cotality.com or kdavidson@cotality.com

This podcast is for educational and entertainment purposes only and does not constitute financial, legal, or tax advice. The hosts are not licensed Financial Advice Providers in New Zealand. All information is of a general nature and does not take into account your personal situation or goals. Please consult a qualified professional before making any financial decisions.

Send us a question/idea/opinion direct via text message!

National property values dipped another 0.3% in September, extending the softer winter trend across Aotearoa New Zealand. But is the market collapsing, or simply grinding through a long-planned transition?

This week on the New Zealand Property Market Podcast, Head of Research Nick Goodall (back from Rotorua) and Chief Economist Kelvin Davidson (dialling in from Hanmer Springs) dissect the September Home Value Index results. They analyse why price declines are broadening into the secondary urban areas, while Christchurch and Hamilton continue to show minor resilience.

The team also makes the case for why property owners should stop anchoring their expectations to the artificial 2021 peak. Kelvin shares our latest analysis showing that only 4% to 5% of properties actually transacted during that brief bubble, and reveals why the 10-year annualised growth rate of 3.2% p.a. reflects the true "new normal" for capital growth - especially in supply-rich markets like Auckland (1.2% p.a.). Finally, they examine the August filled jobs data (+0.2%) and discuss the Treasury’s cautious property updates in the Pre-election Economic and Fiscal Update (PREFU).

This week we discuss:

• September HVI Declines: Why national values fell 0.3% (-1.3% YoY) and why the downturn is now broadening into regional markets like New Plymouth, Palmerston North, and Napier.
• Ditching the 2021 Peak Anchor: Why peak-to-trough comparisons are irrelevant for 95% of property owners, and what the 10-year annualised national growth rate of 3.2% tells us about future gains.
• The Auckland Supply Case Study: How the Auckland Unitary Plan transformed the city's housing supply, holding average annual capital growth to just 1.2% over the last decade.
• Labour Market Resilience (+0.2%): Why filled jobs rose in August and how the difference between IRD tax records and the HLFS survey affects the official unemployment rate.
• The Treasury PREFU Briefing: Unpacking the government's cautious house price revisions and what they mean for projected tax revenues.
• Bledisloe & Holiday Catch-ups: Nick's family trip to Rotorua, Kelvin's hot pool retreat in Hanmer Springs, and the looming Bledisloe Cup clash at Eden Park.

🔗 Explore the September Home Value Index: https://www.cotality.com/nz/insights/articles/nz-property-values-fall-for-sixth-straight-month-as-buyers-retain-upper-hand

Sign up for news and insights or contact on LinkedIn, X @NickGoodall_CL or @KDavidson_CL and email ngoodall@cotality.com or kdavidson@cotality.com

This podcast is for educational and entertainment purposes only and does not constitute financial, legal, or tax advice. The hosts are not licensed Financial Advice Providers in New Zealand. All information is of a general nature and does not take into account your personal situation or goals. Please consult a qualified professional before making any financial decisions.