Residential property values across New Zealand showed signs of stabilising in the three months to May 2025, as the nationwide average nudged up 0.1% to $913,772, according to the QV House Price Index.
Despite this minor lift, values remain 1.1% lower than a year ago and down 14.1% compared to the market peak in late 2021.
Positive movement was concentrated in a handful of centres – Whangārei, Hastings, Nelson and Christchurch each recorded value increases above 1% for the quarter. Auckland and Wellington, however, continued to decline, albeit more gradually than in previous periods. Other regions such as Hamilton and Tauranga posted only marginal gains.
According to QV operations manager James Wilson, conditions remain subdued overall, but buyer sentiment is slowly recovering. He also noted an uptick in investor activity in lower-value and regional markets, which, together with consistent demand from first-home buyers, is beginning to add mild upward pressure on prices.
Despite these signals, he cautioned that high property listings and conservative vendor pricing are keeping overall value growth in check. Broader economic risks – both international and local – continue to suppress any rapid recovery.
The patchy nature of housing market recovery presents specific challenges for property insurers. While areas like Northland and parts of Canterbury are showing increased activity, other centres are still seeing value erosion. These variations highlight the need for underwriting models that reflect region-specific dynamics and climate exposure.
In Dunedin, for example, flood-prone areas are experiencing reduced buyer confidence due in part to rising insurance premiums.
Local QV valuer Baylan Connolly observed that elevated suburbs are gaining popularity as buyers and developers adjust to increased risk awareness and cost considerations.
Insurers are now factoring in not just market value shifts but the growing financial burden of climate-related coverage.
With the cost of rebuilding and reinsurance continuing to rise, the link between real estate conditions and insurance risk is becoming more prominent in portfolio planning.
“The rising cost of insurance, especially in flood-prone areas, is a major consideration for buyers, investors, and developers. Higher insurance premiums are discouraging development in high-risk areas and increasing demand for properties in elevated suburbs,” Connolly said.
The Reserve Bank of New Zealand’s recent general insurance stress test added further context to sectoral risk exposure.
The test modelled a major earthquake event – magnitude 8.7 along the Hikurangi Subduction Zone – and included cascading impacts such as a tsunami and economic downturn.
Participating insurers estimated $62 billion in direct insured losses, extending to $100 billion across the broader market.
While RBNZ found that claims would be honoured under current capital levels, it also concluded that most insurers would need substantial injections from offshore parent companies and reinsurance markets to maintain solvency and resume writing new policies.
The scenario also highlighted the potential financial burden on the government, which would need to support recovery efforts through the Natural Hazards Commission (NHC), infrastructure repair, and social support funding.
GlobalData projects strong growth for New Zealand’s general insurance sector, with gross written premiums forecast to expand at a compound annual rate of 8.3% through 2029.
Property insurance is set to remain the largest segment, accounting for more than 42% of total GWP by 2025, with 10.6% growth expected in 2025.
This expansion is attributed to several factors:
Between 2022 and 2024, the property insurance loss ratio jumped from 69.1% to 96%, reflecting a surge in claims related to natural disasters and climate-driven damage.
