Wellington has the longest road back
Wellington was hit hardest. House prices there are 27.7% below the peak.
In a pessimistic scenario, it could take up to 10 years to get back. The coin-flip outcome is closer to 6 years. And there’s only a small chance of prices recovering inside 4 years.
I know that’s hard for Wellingtonians to hear. But I’d rather put the numbers in front of you than pretend.
Why so long? This downturn has been much deeper than the last one. The last one wasn’t anywhere near this severe. When prices fall further, they have more ground to make up. So 10 years is realistic.
Canterbury is almost there
On the other hand, Canterbury is a bright spot. Prices are just 0.8% below the peak.
It will probably get back to peak prices within a year. Even in a pessimistic run, it would only take about 2.
How do we work these numbers out?
These numbers come from a Monte Carlo simulation.
In plain English, we looked at how the property market has moved in the past.
Then we ran 30,000 versions of the future to see how often prices got back to the peak, and how long it took each time.
That way we get a chart like this where we see a range of outcomes and how the house price might change over time.