Should I sell my property during a market slump?

Not necessarily. Property losses are only realised when you sell. If you can hold through the cycle, especially in high-quality markets, values typically recover over time.

Is now a good time to invest in property?

Yes, downturns can present great buying opportunities. With lower prices, easing interest rates, and more flexible lending, investors can secure strong long-term positions.

Which property markets are performing well in New Zealand?

While some areas like Wellington have declined, markets such as Queenstown, Papamoa, and Auckland have shown resilience and long-term growth.

What should I do if my property's value has dropped?

Hold if possible, speak with your lender early, and use the time to strengthen your position through maintenance, renovations, or debt restructuring.

The Reality of a Market Slump

Staircase Financial
Sep 17
3 min read

People often panic during a market slump, here are some key lessons on how to navigate it.

Lessons for Investors

Recent QV data confirms that Wellington house prices are nearly 30% below their peak . Headlines like these make it easy to panic but the truth is property markets move in cycles. What goes up can come down, and then rise again.

For investors who understand this, a slump is not the end of the road but part of the journey.

At Staircase, we’ve navigated over two decades of property cycles. We’ve seen booms, busts, recoveries and we’ve built a strategy around it. Here’s what we know about the reality of a market slump.

You Only Lose if You Sell

Just like in the share market, a “loss” is only realised if you lock it in by selling for less than you paid for it or selling at a less than favourable time.

Wellington values are down sharply from their highs, but those numbers only matter if you’re forced to sell now. History shows that those who hold quality property through the down cycle often come out well ahead when the market recovers.

Cycles Are Normal, Research Is Key

Property investing isn’t about getting rich quick, it’s about building long-term wealth through understanding cycles. Not every market performs the same, which is why due diligence is critical.

At Staircase, we’ve focused on growth-oriented markets like Queenstown, Papamoa, and Auckland over the past 23 years. These areas have shown strong, resilient performance.

For instance, while Wellington has seen a nearly 30% decline, Queenstown’s average property value is currently 17% above its 2022 peak. That’s the power of informed investing.

Line graph showing house price growth from 2002 to 2025 for Wellington, Auckland, Papamoa, and Queenstown. Queenstown shows the strongest growth, Wellington declines post-2022. — House price growth by region (2002–2025): Queenstown leads long-term gains, while Wellington shows a recent dip, illustrating the value of market selection.

A Slump = An Opportunity

For new investors, downturns can be a gift. Prices are lower, competition is weaker, and sellers are more realistic. For example:

National values are down 13.4% from the 2022 peak , opening doors that were closed a few years ago.
Interest rates are falling again the OCR has dropped from 5.25% to around 3%, easing mortgage costs.
Banks are competing harder for borrowers, offering cashbacks, sharper rates, and more flexible terms.

The message is simple: downturns don’t just hurt, they create buying opportunities for those who are prepared.

What If You’re Stuck in a Slump?

If you already own in a declining market, here are some practical steps you can take:

Hold if possible: Avoid selling under pressure. Lower interest rates are helping to reduce holding costs.
Talk to your lender: Banks are more flexible today than in past downturns, communicate early.
Use time wisely: Focus on renovations, maintenance, or debt restructuring to improve your position for the next upswing.

The Staircase View

We don’t chase every hot market. We apply research and cycle analysis to focus where the fundamentals stack up. That’s why our portfolio has concentrated on markets like Queenstown, Papamoa, and Auckland, which have outperformed through this cycle.

The lesson from Wellington’s slump isn’t to avoid property, it’s to respect the cycle and pick your markets carefully. Slumps are real, but so are recoveries. The investors who stay calm, stay informed, and stay invested are the ones who build long term wealth.

Ready to Invest in Property Smarter?

Whether you're navigating a downturn or planning your next move, the right strategy (and the right market) make all the difference. At Staircase, we help investors make informed decisions backed by over 20 years of market insight. Talk to our team today and discover opportunities that align with your goals.

Book your free strategy session

Comments

Our Latest Blogs

This publication has been provided for general information only. Although every effort has been made to ensure this publication is accurate the contents should not be relied upon or used as a basis for entering into any products described in this publication. To the extent that any information or recommendations in this publication constitute financial advice, they do not take into account any person’s particular financial situation or goals. We strongly recommend readers seek independent legal/financial advice prior to acting in relation to any of the matters discussed in this publication. No person involved in this publication accepts any liability for any loss or damage whatsoever which may directly or indirectly result from any advice, opinion, information, representation, or omission, whether negligent or otherwise, contained in this publication.