New Zealand housing affordability has returned to its long-term average following the extraordinary rise in property prices during the Covid-19 pandemic. New Cotality figures show lower house prices, rising household incomes and easing mortgage rates have substantially improved the position for buyers — although owning a home remains far from cheap.
eLocal Report: Based on reporting by RNZ Digital Reporters HERE
House Prices Back to 6.7 Times Income
Cotality figures show New Zealand's national house value-to-income ratio fell to 6.7 in the second quarter of 2026.
That matches the long-term average recorded between 2004 and 2026 and represents a substantial reversal from the pandemic property boom.
At the market's peak in 2021, national house values were approximately 9.8 times household income.
Cotality NZ chief property economist Kelvin Davidson said several years of softer property prices, rising household incomes and falling mortgage rates had combined to improve affordability.
Housing was not necessarily cheap, he said, but affordability was no longer the significant barrier it had become during the pandemic-era boom.
Mortgage Burden Falls
The improvement is also showing up in mortgage servicing costs.
Cotality estimates repayments required to service a new mortgage have fallen to 40 percent of gross household income.
That is now below the long-term average of 42 percent and considerably below the 54 percent peak recorded in late 2021.
For prospective buyers trying to accumulate a deposit, there has also been some improvement.
The estimated time required to save a 20 percent deposit has fallen to 8.9 years, slightly below the long-term average of nine years.
Rent Affordability Also Improves
Renters have experienced some improvement as well.
Median rents now consume approximately 25.5 percent of household income nationally, broadly matching the long-term average.
Cotality said this represented the most favourable conditions for tenants in about a decade.
Davidson cautioned, however, that the headline figure does not reflect every household's circumstances. Tenants paying typical market rents but earning below-average incomes could still face significant affordability pressures.
Auckland and Wellington See Strong Turnaround
The improvement has not been evenly distributed across New Zealand.
Auckland, Tauranga and Wellington have recorded some of the strongest affordability gains following several years of subdued property values.
Auckland's value-to-income ratio has fallen to 7.2, while Wellington has the lowest ratio among the main centres at 5.5.
Christchurch and Dunedin have experienced more modest improvements.
Davidson said markets such as Auckland, Tauranga and Wellington could not necessarily be described as inexpensive, but they were now more affordable than they had been for many years.
The Other Side of Falling House Prices
Improved affordability for buyers has come with a downside for some existing homeowners.
Earlier Cotality figures showed 13.1 percent of properties sold nationally during the second quarter changed hands for less than their owners originally paid — the highest proportion since 2012.
The figure reached 20.9 percent in Auckland and 18.4 percent in Wellington.
Apartments have been particularly affected, with 45.4 percent of apartment resales recording a loss, representing the weakest resale performance for the sector since 2010.
The figures highlight the two sides of New Zealand's housing correction.
Lower property values have helped bring buying a home closer to historical affordability levels, while owners who purchased near the top of the pandemic boom can face substantial losses when selling.
Affordability Has Improved — But Housing Isn't Cheap
Returning to the long-term average does not mean New Zealand has suddenly become an inexpensive place to buy a home.
A national value-to-income ratio of 6.7 still means the typical property is worth nearly seven times annual household income, while a 20 percent deposit can take almost nine years to accumulate.
What has changed substantially is the position relative to the extraordinary conditions of 2021.
House prices have softened, household incomes have risen and mortgage rates have eased. Together, those factors have unwound much of the deterioration in affordability created during the pandemic property boom.
For prospective buyers who were effectively priced out several years ago, the numbers suggest the housing market is finally moving back towards its historical norms.
Independent reporting. Original context. Credited sources.
Source
RNZ Digital Reporters — Housing affordability returns to average following pandemic price spike
19 August 2026
https://www.rnz.co.nz/news/personal-finance/1056086/housing-affordability-returns-to-average-following-pandemic-price-spike