New Zealand's residential market in 60 seconds

New Zealand's housing market held broadly steady over the past month, continuing this year's sideways pattern. Election campaigning is now well underway, but with housing so far remaining largely outside the political crosshairs, we do not expect this to be a major disruptor to market conditions.

House prices were slightly down over the month but still sitting within the normal spread of the sideways track we have seen so far this year. Sales activity was also softer than the same time last year, though not dramatically different. Regional performance continues to favour the South Island. Canterbury, Otago and Southland have seen the strongest price growth over the past 12 months, supported by relatively strong employment and solid internal migration.

In terms of underlying drivers, the supply of homes for sale remains above the same time last year in most regions. This is limiting price pressures in the market. Home loan rates rose modestly over the past month, up 10-20 basis points across fixed terms under three years. This was largely anticipated and the market is expected to largely shrug this off.

With election campaigning underway, there has been various media discussion about election slowdowns. In past election cycles, the impact on the housing market has depended on how prominently housing features in the political debate. Election slowdowns were seen in 2014 and 2017 as the policy debate was actively targeting housing affordability. The 2020 and 2023 elections were largely ignored by the market. So far, the housing market has been largely out of the crosshairs for politicians, so the election is unlikely to be a major factor this year. We also see some scope for a lift in activity towards the end of the year due to pent up demand from buyers who hesitated during the oil shock earlier this year.

Our view is the market is likely to remain broadly neutral through the second half of 2026, with a continuation of the South Island outperforming the North Island.

In these competitive market conditions, it is critical that sales processes are set up for success through realistic price appraisals, effective marketing and dedicated salespeople.