FOMO fades and buyers walk as vendors lose pricing power
New survey results from economist Tony Alexander (pictured) point to a shifting balance of power in New Zealand’s housing market, with investors pulling back while first-home buyers remain highly active.
The latest NZHL Property Report, based on responses from 322 licensed real estate agents nationwide, shows more investors now looking to sell than buy, static prices at best, and buyers increasingly willing to walk away if vendors won’t meet the market.
Alexander notes that “more investors are looking to sell while fewer are looking to buy, but first home buyers remain highly present,” with a net 49% of agents saying they are seeing more young buyers in the market. Although that figure is down from 62% last month, he says it “remains strong”.
At the same time, auction rooms and open homes are cooling after a late-2025 flurry. A net 11% of agents report more people at auctions – still positive, but down from 19% a month earlier – while the net share seeing more open-home attendees has dropped from 55% to 23%. Several agents told Alexander that, for the third year running, a pre‑Christmas burst of interest has faded after the summer holidays.
FOMO fades, prices flat, vendors under pressure
On prices, the survey shows a stalemate. A net 2% of agents feel prices are falling in their area, which Alexander describes as “essentially the same statistically as saying as many agents see prices rising as see them falling. Prices are flat.”
Fear of missing out has also eased markedly. The proportion of agents observing FOMO among buyers climbed to 26% late last year but has now dropped back to 13%.
Comments from agents “firmly indicate that buyers do not feel they need to rush into making a purchase decision and quickly walk away if vendors are reluctant to properly negotiate”.
ANZ’s latest Property Focus likewise reports national prices having “a soft start to the year and continue to show little momentum”, after the bank cut its 2026 house price inflation forecast from 5% to 2%.
Alexander says the message for sellers is clear: properties need to be well presented, marketing more targeted, and “realisation that they will not achieve the 2021 valuation needs to be present.”
Separate realestate.co.nz figures also show fewer formal asking‑price cuts at the end of 2025, with just 3% of listings discounted, hinting that vendors are setting more realistic prices upfront rather than slashing them later – in line with Alexander’s call for sharper pricing and presentation.
Structural slide in investor appetite
The sharpest change is on the investor side. A net 23% of agents now report fewer investors in the market as buyers, the weakest reading since mid‑2024. At the same time, a net 38% say more investors are bringing properties to market to sell, up from 25% last month.
Alexander argues this confirms “a structural decline in investor demand for residential property” driven by “changed tax rules… reduced expectations of capital gains, tenant legislation etc.”
Around 43% of agents believe nothing is currently motivating investor demand; where investors are still looking, “they are firmly driven by the hope of finding a bargain.”
Overall, a net 37% of agents say conditions now favour buyers, making this the strongest buyer’s market since May last year – even as broader economic indicators show tentative signs of improvement.
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