Every time a new piece of economic data is released, it feels as though the country collectively holds its breath in the hopes of some good news.
The recovery is underway, but it remains firmly stuck in first gear. The Reserve Bank itself describes it as “uneven”, with strong exports supporting parts of the economy while weak income growth, job insecurity and flat house prices continue to weigh on household spending, particularly in Wellington and Auckland.
What makes this recovery different from those we have experienced before is the absence of one familiar ingredient: rising property prices.
Five Years of Downwards Pricing
Wellington’s property market peaked in late 2021. Almost five years later, values remain well below those highs. Even the significant reduction in interest rates we saw before rates began rising again this year failed to materially change that trajectory.
That matters beyond homeowners simply feeling better about the value of their property. Confidence plays a significant role in economic growth. When people feel wealthier and more secure, they are generally more comfortable spending, investing and taking financial risks.
We haven’t had that wealth effect in Wellington.
Instead, New Zealand’s recovery has been driven by more traditional economic engines, particularly strong exports, tourism and improving business investment. That helps explain why the recovery has felt so slow in the capital. The property-led confidence boost many expected simply hasn’t arrived.
There is a great scene in The Castle where Con returns from Bonnie Doon with a bargain chicken coop. When he reveals what he paid, Darryl responds with the now-famous sentiment: you couldn’t even buy the materials for that.
You can’t buy the materials for that.
Increasingly, I find myself thinking the same thing about Wellington property.
Take a relatively modest 100-square-metre home. Rebuilding something similar today could easily run towards $600,000 once construction, professional fees, council costs and GST are taken into account.
The Wellington region’s median sale price in August was $717,000.
Of course, an existing house isn’t a new build and every property is different. But the comparison is still striking. For not much more than the potential replacement cost of the dwelling alone, buyers are purchasing both a home and the land beneath it.
At some point, value has to matter.
Have We Hit the Floor?
Wellington prices remain down year-on-year, with much of the latest weakness appearing through the middle of the year.
At the beginning of 2026, there was a growing belief that we had finally reached the bottom. Then interest rates changed direction again. Borrowing costs have a very real impact on what buyers can pay, and Wellington has continued to test where its floor might be.
So have we reached it now? Who knows? And anyone who tells you they know with certainty probably doesn’t.
I’m often asked whether now is the best time to sell. My answer is always much the same: we can make decisions based on what we know today. We can’t make them based on what might happen next year.
Someone will win Lotto next week. I just can’t tell you the numbers.
The Wellington Market
I attended a conference last month where a couple of the speakers had travelled over from Sydney and were visiting Wellington for the first time.
They loved it.
They talked about the architecture, the character of the city and how friendly people were. And I realised how accustomed we have become to talking Wellington down.
There is no escaping the challenges the capital has faced. In value terms, parts of our market have effectively wound the clock back years. Confidence has been battered and the recovery has taken far longer than most expected.
But perhaps we have become so focused on what has gone wrong that we have stopped noticing what remains.
This is still a compact, character-filled capital city surrounded by coastline, with established infrastructure, excellent schools and suburbs within minutes of the CBD. And after almost five years of falling or stagnant property values, buyers can now purchase homes at prices that, in many cases, would be extraordinarily difficult to recreate from scratch.
That doesn’t mean I’m calling the bottom. The market simply is what it is.
Wellington Market Quick Stats
What’s on in Welly?
Creedance Clearwater Revival Tribute Concert – Wednesday 21st October
Celebrate the music of Creedence Clearwater Revival and John Fogerty, as they present the music of one of the world’s most iconic bands – from the songs they wrote, to the songs covered, to the songs they wrote for others.
Click for details and to book tickets
Royal New Zealand Ballet Presents Sleeping Beauty – 29th October
The age-old story of the princess who pricks her finger and falls into an enchanted sleep, only to be wakened by true love, is brought to life in picture-perfect designs by Gary Harris, classical choreography and Tchaikovsky’s magical music. A touch of wizardry from Wellington’s Wētā Workshop adds to the joy and wonder, making this the perfect pre-Christmas treat for audiences of all ages.
Click for details and to book tickets
Phoenix Double Header – Sunday 18th October 2026
The Wellington Phoenix return to Hnry Stadium for their historic 20th season, with 12 home matches locked in for 2026/27. The campaign kicks off on 18 October with a double header between the Phoenix Women v Melbourne City and then the Phoenix Men v Melbourne Victory – a fitting rematch of the club’s inaugural A-League fixture from 2007.
Book your tickets here
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