House Price Slide: Why the Cycle Shows It’s Over
- Staircase Financial
- Oct 14
- 3 min read
Updated: Oct 27
After three years of softening values, New Zealand’s housing market is showing clear signs the worst is behind us. Media headlines have begun calling the “end of the slide” but beyond the headlines, what does the property cycle research tell us?
Understanding the Property Cycle
Cycles Always Repeat
Extensive research into New Zealand property cycles spanning decades shows the same rhythm repeats:
Boom → prices surge on the back of rising demand and easy credit.
Slump → prices flatten or retreat as affordability tightens and confidence wanes.
Recovery → activity slowly returns, rents rise, and eventually prices follow.
Every cycle contains these phases. The slump is usually painful, but it is temporary. Importantly, history shows that once the market has corrected, prices don’t keep falling indefinitely recovery is the natural next phase.
Why the Market Has Bottomed Out
Several cycle indicators now confirm that the “slide” phase is essentially over:
Affordability improving
Falling interest rates and softer values have sharply reduced debt servicing costs. Valocity data shows one-year fixed mortgage rates as low as 4.5%, with forecasts of an OCR cut to 2% by early 2026, further improving the affordability dial.
Sales volumes turning up
while still below long term averages, volumes have begun climbing, a classic early recovery signal.
Investor re-entry
cash rich investors are returning to the market, helped by restored interest deductibility and cheaper finance, historically a marker of cycle turning points.
Values stabilising
Valocity’s property price index nudged up 0.1% in September after slipping in previous months, suggesting the market floor has formed. The national median sale price sits at $735,000, reflecting activity concentrated in more affordable brackets. This confirms affordability is intact at the entry priced property level in particular which is a typical early recovery feature.
These drivers are exactly what research identifies as “hot spot triggers” the tipping points that shift markets from stagnation back into growth.
Historical Lessons From Past Cycles
After the 1998 correction, values stabilised in 1999 before strong growth took hold within 3 years (by 2002).
After the 2008 slump, the market bottomed in 2009 yet within two years Auckland was booming again.
After the 2017 slump, the Auckland market bottomed in 2019 yet within two years prices had boomed again.
The current downturn has already run longer and deeper than those episodes. Cycle research suggests the correction phase has largely run its course.
What It Means for Buyers and Investors
If you wait until the headlines are dominated by “record highs” again, you’ll have missed the best buying window.
History shows the real wealth is built by those who act in the early recovery phase when prices are stabilising, rents are poised to rise, and confidence has not yet returned in general.
Conclusion
Yes, the market has been through a significant slump. But cycles are cycles and all the signs point to New Zealand housing now shifting from slide to recovery. For those who understand timing, this is not the end of the story, it’s the beginning of the next growth phase.
If you're interested to know what this means for you, book a free chat with our team to learn more!
Frequently Asked Questions (FAQ)
Has the New Zealand housing market really stopped falling?
Yes. Most data shows prices have stabilised after a multi-year decline. Indicators like rising sales volumes, investor activity, and lower mortgage rates all signal the market has reached its floor.
When will house prices start rising again?
Based on previous property cycles, steady price growth typically resumes 12–24 months after the market bottom. Early signs of recovery are already appearing in 2025.
What factors suggest a recovery phase?
Improving affordability, easing interest rates, and renewed investor confidence are classic signals of the shift from slump to recovery.
Is now a good time to buy property in New Zealand?
For long-term investors or home buyers, the early recovery phase often offers the best opportunities before prices climb again.
How long do housing cycles usually last?
Historically, New Zealand property cycles span about 8 to 10 years, moving through boom, slump, and recovery stages.
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