Cautious recovery favours first‑home buyers and patient investors
Property values across New Zealand started 2026 much as they ended 2025 – going nowhere fast.
Cotality NZ’s latest Home Value Index shows national values dipped just -0.1% in January, with the median sitting at $802,617, “-1.0% lower than a year ago, and still down by 17.5% from the peak in early 2022 – which was $972,743.”
Standalone houses are down -0.7% over the year, townhouses -1.7%, and apartments -4.1%, although apartments make up only about 4% of national stock. Across the main centres, conditions remain mixed: Auckland (-0.3%) and Wellington (-0.1%) slipped, Hamilton and Christchurch were flat, while Tauranga and Dunedin eked out modest gains.
Cotality NZ chief property economist Kelvin Davidson (pictured) said “January’s muted result for property values at the national level was simply a continuation of the trends we saw throughout most of last year.”
While the HVI points to another flat start, Cotality’s separate Decoding 2026 sentiment survey suggests the housing market is entering 2026 on firmer footing, with confidence rebuilding but expectations for only modest, income‑like gains rather than another boom.
Lower rates help, but buyers stay cautious
For Kiwi mortgage advisers, the key shift is that interest‑rate relief is finally filtering through to borrowers, even as confidence stays fragile.
“New borrowers and also existing mortgage holders will be feeling the benefits of lower interest rates and be more able to act in the market,” Davidson said.
At the same time, “there’s still a good stock of listings out there for buyers to choose from and a cautious attitude persists, especially as the recovering economy has yet to improve job security and employment levels,” he said.
The net effect? “Buyers aren’t in a rush to bid up prices, although vendors aren’t generally having to drop their expectations much either,” Davidson said.
The Cotality economist also points to “the latest lift for inflation and talk about earlier OCR increases” and an election year as factors that could keep some households on edge – all reasons for advisers to keep strong rate‑rise buffers in servicing assessments.
Regional patchwork and an active FHB cohort
Regionally, Auckland and Wellington remain key “soft patches”, with parts of Auckland City and Manukau weighed down by townhouse and apartment supply, plus buyer caution around build quality, insurance costs and low migration. Wellington City was flat in January and still down -1.0% year‑on‑year, with Porirua, Upper Hutt and Lower Hutt all recording further dips.
First‑home buyers are a notable bright spot.
“Of course, would-be first-home buyers won’t be complaining about flat to falling property values. They continue to be a strong presence around Wellington, accounting for a record 37% of purchases in 2025,” Davidson said.
Outside the main centres, parts of Southland and Canterbury – including Invercargill, Gore, Timaru, and Ashburton – have already pushed beyond previous peaks. Davidson notes that “some parts of Southland and Canterbury are rising a bit more than elsewhere due to property values being relatively low, and better affordability means buyers can arguably stretch a little more to secure the deal,” with a stronger farming sector also “bolstering economic confidence in the provinces.”
Outlook: more sales, modest gains
Looking ahead, Davidson expects “sales activity to continue to rise this year, bringing down the stock of unsold listings, and contributing to rising house prices,” supported by “lower interest rates, a growing economy, and the likelihood of gradually falling unemployment.”
However, he cautions that “anyone hoping for runaway increases in house prices could be disappointed,” citing rising supply, recovering dwelling consents, and looming debt‑to‑income limits as guardrails on growth.
First‑home buyers “are likely to remain a strong force in 2026, due in no small part to solid access to low deposit finance at the banks,” while investors are back but “will be keeping a close eye on the politics, particularly around a possible capital gains tax and any discussions about interest deductibility.”
That trend is echoed nationally, with Tony Alexander’s latest NZHL Property Report noting that “first-home buyers continue to have a dominant presence in the housing market while investors are showing no particular new surge in purchasing interest.”
“All in all, it could prove to be another relatively subdued year for housing in 2026,” Davidson said – a backdrop where Kiwi mortgage advisers can add real value by helping clients navigate flat prices, shifting policy, and a slowly improving rate environment.
Read the Cotality report here.
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