The residential property market in New Zealand has recorded its seventh consecutive monthly decline in sales. July figures showed a 6.4% drop compared to the same period last year, with 6,935 properties changing hands. National values fell by 0.3%.
Auckland lawyers handling property transactions report a clear shift toward a buyers’ market. Fewer auctions are reaching completion, and signed deals are collapsing more often. Buyers are adding more conditions to offers, while vendors needing to sell are reducing prices.
More conditions, more deals falling through
Tina Hwang, a director at Queen City Law, confirmed the trend. “There have been more conditional sales,” she said. “There’s been an increase in the number of conditions, and more deals are falling through.”
Buyers frequently include blanket due-diligence clauses and make purchases dependent on selling their current home. This creates long chains of linked transactions. Extensions are common, and some buyers demand repairs or other concessions before waiving conditions. Hwang noted that large deals have collapsed during due diligence, while others proceed with extended settlement dates.
At the higher end of the market, the differences between expectations and reality are more pronounced. Bryce Town, a consultant at Kent Legal, said vendors who genuinely want to move must adjust their expectations. For properties priced between $5 million and $6 million, sellers may need to accept offers $700,000 to $800,000 below their initial asking price.
With more inventory available, buyers can walk away from properties with hidden risks. Town recently advised a client to withdraw from a purchase after uncovering concerns about the body corporate’s management. “We didn’t like how it was functioning and foresaw future problems,” he explained.
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The apartment market is also seeing challenges, with distressed sellers offloading problematic units at steep discounts. “Some properties have been on the market a long time,” Town said. “The reason they haven’t sold is because they have issues.”
First-home buyers step in
First-home buyers are the only group showing increased activity, making up 29% of July’s purchases. Their transaction volumes continue to rise, supported by lower prices and a wider selection of homes. The extended slowdown has increased available stock, giving buyers more leverage.
Kelvin Davidson, chief property economist at Cotality, said the situation reflects a standoff. “Buyers aren’t rushing because there’s plenty of stock, but sellers aren’t dropping prices much since job losses remain limited,” he noted. “This keeps property values subdued.”
This situation has created fragile transaction chains, where straightforward deals now depend on multiple conditions. The pattern resembles past market cycles, but the volume of conditions attached to offers is unusually high.
Davidson does not anticipate a quick recovery. “Sales volumes are likely to remain flat or decline slightly in the coming months,” he said.
For vendors, the advice is straightforward: meet the market or risk leaving the property unsold. Recent legal disputes over financial missteps highlight the risks of overestimating value in uncertain conditions.
