New Zealand house sales drop as Iran war hits buyer confidence
Local bank economists expect house prices will fall this year
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[WELLINGTON] New Zealand house sales slowed in the first quarter as rising mortgage interest rates and the Iran war forces buyers to the sidelines.
Sales in January, February and March were all lower than the corresponding year-earlier months, property consultancy Cotality said on Thursday (Apr 23) in Wellington. Cumulatively, sales in the three months to March were 3.8 per cent less than the first quarter of 2025 while transactions in the 12 months to March are down from a December peak, the report showed.
“It’s not a sharp downturn, but it does show that confidence is still muted and buyers are taking their time,” said Kelvin Davidson, chief property economist at Cotality. “For now, prices are holding up reasonably well, but turnover is still on the softer side.”
Prospects for the New Zealand housing market have dimmed as lenders raise home-loan interest rates in response to rising wholesale borrowing costs and expectations the Reserve Bank of New Zealand (RBNZ) will commence a tightening cycle later this year.
The Middle East conflict is adding to the lack of momentum as high fuel costs squeeze household spending and stoke uncertainty for property investors and owner occupiers.
New Zealand home-loan interest rates rose further in March, with the two-year special rate exceeding 5 per cent for the first time in 11 months, according to RBNZ data. Since then, a number of lenders have announced further increases.
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Local bank economists expect house prices will fall this year, while the RBNZ projected no change in its February forecasts ahead of the Iran war erupting.
“Until confidence improves and movers start to re-engage, sales volumes are likely to remain subdued,” said Davidson. “Near-term downwards pressure on prices would not be a surprise.” BLOOMBERG
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