Overview
- 71% of New Zealand respondents expect house prices to rise in 2026
- Canterbury is the most confident region, with 87% of respondents expecting prices to rise and almost two-thirds forecasting growth above the national average.
- Following the OCR cut to 2.25%, the expectation of short-term rate relief has softened, with more respondents now anticipating rates to remain on hold.
New Zealand’s housing market is entering 2026 on firmer ground after an extended period of soft values and cautious buyer behaviour, according to Cotality’s Decoding 2026 report.
The report examines expectations among real estate agents, alongside views from banking, lending and related property sectors, for the year ahead across New Zealand and Australia.
Survey results suggest the outlook for New Zealand house prices is improving, although expectations around the pace of growth remain measured. Almost three-quarters of New Zealand respondents expect prices to rise in 2026. Within that group, 14% anticipate growth above 5%.
Expected house price changes in 2026
Cotality NZ Head of Research Nick Goodall said while sentiment has lifted from recent lows, expectations remain more conservative than in Australia, reflecting a weaker economy and jobs market and persistently high levels of for-sale listed supply.
“The survey provides an important industry pulse on how confidence is rebuilding across housing after a prolonged period of subdued conditions,” he said.
“Sentiment around price direction has clearly improved, but expectations remain grounded with the majority of respondents anticipating modest gains rather than a rapid rebound, which reflects the cautiousness of borrowers and the stuttering economy.”
Cost-of-living and home ownership pressures, debt-to-income limits and abundant choice are keeping expectations realistic, even with the shift from pessimism to cautious optimism.
He added that the gap between New Zealand and Australian expectations highlights the different stages of recovery across the two markets.
“Compared with Australia, New Zealand’s market remains more subdued and therefore its growth outlook is cautious,” Mr Goodall said.
“That speaks to the slower pace of New Zealand’s economic recovery locally, uncertainty around our jobs market and a greater sensitivity to borrowing conditions, particularly in higher-priced regions.”
Regional divergence remains a defining feature of the outlook
Canterbury was the most confident region, with 87% of respondents expecting prices to rise and almost two-thirds forecasting growth above the national average. Auckland sentiment has improved but remains cautious, with 73% anticipating price growth amid concerns around employment conditions, affordability and lending appetite.
Wellington continues to lag, with 63% expecting prices to rise, though only 7% foresee growth above 5% and most expect underperformance relative to the national trend.
Mr Goodall said New Zealand’s housing market recovery is progressing at different speeds across regions and buyer segments.
“On the whole New Zealand’s housing market is showing tentative signs of improvement, but the same rate of recovery can’t be applied everywhere, it’s quite fragmented,” he said.
“Improving confidence is being tempered by affordability constraints, the jobs outlook and cautious lending conditions, particularly in larger urban markets.”
Interest rate expectations shape sentiment
Interest rate expectations continue to significantly influence confidence. The survey period spanned the Reserve Bank of New Zealand’s late-November OCR decision, with sentiment shifting after the announcement.
Prior to the decision to cut the OCR by 25 basis points to 2.25%, 54% of respondents expected at least one rate cut in 2026. Following the announcement, that share fell to 43%, with more respondents now anticipating rates to remain on hold.
Interest rate predictions before and after the Reserve Bank of New Zealand’s late-November OCR decision
“The expectation of short-term rate relief has definitely softened following the rate cuts we had in 2025,” Mr Goodall said.
“Lower mortgage rates have begun flowing through the market as fixed terms roll off and they’ve also helped to support record levels of first home buyer activity. We’re also starting to see mortgaged investors gradually re-enter the market too, even as capital growth expectations remain tempered.”
Policy reform adds guarded optimism
Planning reform has added a layer of longer-term optimism to New Zealand’s housing outlook. Almost half of respondents believe recent changes to planning laws and the Resource Management Act will benefit their region over the next two to three years, though most acknowledge it is too early to assess the impact on development activity or housing supply.
Mr Goodall said the reforms are expected to support supply over time, but there will be limited immediate impact and market conditions will continue to be impacted by demand-side constraints.
“Policy reform has the potential to improve total housing supply with greater build intensification, but the effects are likely to be gradual rather than immediate,” he said.
“In the short term, price outcomes will continue to be driven by sales volumes, listing levels and borrowing capacity.”
Mr Goodall said the survey suggests a more stable outlook for 2026 than in recent years, with confidence rebuilding but growth expectations muted. The general election will also pose a further level of uncertainty as we approach the second half of the year.
“Credit availability, interest rates and how quickly supply can respond to renewed demand will determine how far and how fast New Zealand’s house prices move up from here.”
Decoding 2026 is based on Cotality’s annual Customer Insights Survey, capturing more than 1,100 responses collected between 26 November and 10 December 2025. The survey includes professionals across real estate, banking, lending and adjacent property sectors in Australia and New Zealand. It provides a detailed view of how sentiment is forming across the housing sector, helping property professionals assess market conditions, regional risk and opportunity, and strategic priorities as conditions continue to evolve.
