Special Report: Record Property Market Lows — Should Investors Panic?

Property market lows: should investors panic? RNZ reported this week(opens in new tab) that Auckland and Wellington both recorded the longest time to sell a property in August that’s ever been recorded. Wellington also had its lowest-ever August sales count. Sales nationwide were down 13% on a year earlier — the sixth-lowest August total in 35 years. Headlines like this tend to follow a pattern. Report the worst-sounding number, let the reader draw the darkest conclusion, move on. We think that pattern deserves a second look. That’s where our own professional opinion comes in, not just the data.

Two questions actually matter here: does this mean property was a bad investment choice? And what should investors actually do about it right now? Our answers: no, and hold on — buy the dip if you’re able to.

 

What the Data Actually Shows

The specific numbers are real, and worth stating plainly rather than softening. Auckland’s median time to sell in August was 54 days, against a 10-year August average of 43. Wellington’s median was 60 days, against a 10-year average of 41. The national house price index was down 0.9% year-on-year. Property data firm Cotality has separately described this as the longest and deepest downturn in 30 to 40 years. National values are down around 17.5% from their 2021 peak — closer to 30% once inflation is factored in.

Those are genuinely soft numbers for Auckland and Wellington specifically. What the “record low” framing leaves out is that this isn’t a uniform national story at all. Southland posted an 8% annual rise to a record high. Invercargill, Marlborough, and parts of Canterbury have also pushed to new records over this same period — the one some commentators are calling the worst downturn in decades. If this were a fundamental problem with property as an asset class, it’s hard to explain why some regions are setting records. Others are hitting lows in the very same month.

This Is a Correction, Not a Collapse

Here’s the context that “record low” headlines rarely include: the current lows are being measured against an unusually inflated peak. Auckland and Wellington both boomed hard through 2020–2021, well beyond what incomes in either city could comfortably support. As one economist put it plainly: what goes up must come down. Housing affordability got genuinely stretched in both markets during that boom. A correction after an unsustainable run-up isn’t evidence the underlying asset is broken. It’s evidence the boom itself was, at least partly, overextended.

This is also not a new pattern for property. Every market cycle in New Zealand’s history has included a boom, a correction, and a recovery. The specific numbers differ each cycle, but the shape doesn’t. Judging property as an asset class by looking only at the trough of the current cycle is a bit like judging a share portfolio by its worst month, rather than its ten-year return. The full cycle — peak, trough, and recovery — is what actually matters.

Does This Mean Property Was a Bad Choice?

Not on the evidence here. A few things worth holding in mind:

Time horizon matters enormously.

Anyone who bought well before the 2021 peak, and has held since, is very likely still sitting on a real gain despite the current downturn. The “record low” framing measures the drop from peak, not the return from original purchase. Property has historically delivered reasonable returns, measured over a full cycle. It has never promised a straight line upward every single year.

Regional divergence tells its own story.

Provincial markets are setting records in the same month Auckland and Wellington hit lows. The explanation lies in factors specific to those two cities — a townhouse supply overhang, election-year uncertainty, affordability limits reached during the 2021 boom — not in property itself as an investment class.

A downturn doesn’t erase the reasons people invest in property in the first place.

Rental income, leverage, and long-term capital growth over a full cycle are still the same fundamentals. They haven’t changed just because the current point in the cycle is uncomfortable.

None of this means every property purchase made in 2021 was a good one. Buying at the top of any cycle is expensive, in property or shares alike. It does mean that a downturn in year four or five of a cycle doesn’t retroactively prove the whole asset class was a mistake.

What Should Investors Actually Do Right Now?

Hold on.

Selling into a trough purely because the headlines feel grim locks in a loss. A normal market cycle would likely have recovered that loss, given time. This is the same principle that applies to any asset class. Panic-selling at the bottom is usually the worst version of the decision, not the safest one.

Buy the dip, if you’re genuinely able to.

Soft sentiment and longer selling times generally mean less competition and more room to negotiate. These are exactly the conditions disciplined buyers look for, rather than avoid. Buying when a market feels uncomfortable, rather than when everyone else is confidently bidding at the peak, is precisely how some of the better long-term property outcomes get made.

 The Honest Caveats

We’d be doing you a disservice if we presented “hold on and buy the dip” as advice that applies equally to everyone. It doesn’t.

If you’re highly leveraged, facing genuine cash flow pressure, or would need to sell regardless of market conditions, “hold on” isn’t simply available to you as an option. Your actual financial position needs to drive the decision, not a general market view. See the real cost of a rental property for how to work out whether your specific numbers can actually sustain holding through a soft patch. “Buying the dip” only makes sense if it fits your broader financial position, too. See can I afford to buy an investment property (available 30 Nov 2026) before assuming a soft market alone makes now the right time for you specifically.

This is also not a case for concentrating everything in property regardless of cycle conditions — see don’t put all your eggs in one basket for why diversification matters in good markets and bad ones alike.

Our View

Headlines built around “record lows” are technically accurate. In our view, though, they’re incomplete. The current downturn in Auckland and Wellington is a real, measurable correction following a genuinely overheated boom. It’s not evidence that property has stopped working as an asset class, and it’s not a reason to abandon a long-term strategy just because of where the cycle happens to sit today. For investors in a genuine position to do so, this looks far more like an opportunity than a warning sign.

Talk to EpsomTax.com About Your Specific Position

Whether “hold on” or “buy the dip” actually makes sense for you depends entirely on your own numbers, not a general market view — ours or anyone else’s.

Contact EpsomTax.com to work through your specific position before making a decision either way. We work with New Zealand property investors through every phase of the cycle, not just the comfortable ones.