New Zealand house prices set for slight gains in 2026, BNZ says
In November, the Reserve Bank of New Zealand cut the Official Cash Rate to 2.25%
[WELLINGTON] New Zealand’s housing market lacks momentum and prices will rise just 2.1 per cent this year despite an economic recovery, according to Bank of New Zealand (BNZ).
The lender published fresh forecasts on Monday (Jan 12) in Wellington after previously projecting a 4.4 per cent price increase in 2026. The revised outlook reflected technical adjustments and was not a significant change in BNZ’s view, Stephen Toplis, head of research, said.
“We are talking about very modest movements,” he said. “There’s not much momentum out there and the risk is that momentum doesn’t pick up as people are anticipating.”
Optimism about the residential property market has been fanned by a drop in interest rates and signs an economic recovery is under way. However, the pace of recovery may be tempered by still-high unemployment, recent increases in home-loan interest rates and a steady supply of houses being offered for sale.
“There is still a large number of homes coming to market and being listed,” said Toplis. “The supply of houses has been at least as strong as the increase in demand.”
In November, the Reserve Bank of New Zealand cut the Official Cash Rate (OCR) to 2.25 per cent, down 325 basis points since July 2024. That aggressive easing and a revival of business confidence sparked a 1.1 per cent lift in gross domestic product in the third quarter.
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Still, investor bets that the OCR may rise late this year has lifted wholesale borrowing costs and have led banks to raise home-loan rates for terms of two years and longer.
Property consultancy Cotality last week projected a 5 per cent lift in values in 2026. Prices fell 1 per cent in 2025 after dropping 2.7 per cent in 2024, Cotality reported. BLOOMBERG
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