Younger clients, falling rents, and shifting voter loyalties
A visible split inside the National Party over falling house prices is highlighting a deeper generational divide over homeownership – and it has direct implications for how mortgage advisers talk to both older and younger clients.
In recent months, Housing Minister Chris Bishop and Prime Minister Christopher Luxon (pictured left to right) have been publicly out of sync on whether falling prices are desirable.
Luxon has said he wants to see “modest” and “consistent” house price increases, while Bishop has argued New Zealand prices are still too high and need to come down, Stuff reported.
“Average house prices in New Zealand are too expensive,” Bishop said in June, adding that he wanted to see “housing to be more affordable”.
Prices 17.4% off the peak – but still a stretch for many buyers
Recent housing data from Cotality shows the national median house price now at $806,551, 17.4% below the early‑2022 peak.
Major centres have seen even sharper corrections:
- Auckland is 22.9% below its peak
- Wellington is down 25.1%
- Tauranga is 15.2% lower
Christchurch is the outlier, only 3.8% below its peak.
Rents flatten, and Bishop backs tenants pushing for discounts
Rents – and renters – have also become a focus for Bishop. He has recently urged tenants to use their leverage to negotiate.
“Having rents falling is actually a good thing,” Bishop said on Wednesday, after spending recent months highlighting data showing rents either easing or moderating.
Ministry of Housing and Urban Development data points to either flat or falling rents for new tenancies in the main centres. Nationwide, new rents were down 0.4% year on year in September, with Wellington seeing a 6.4% drop and Auckland down 0.6%.
A party caught between boomers and first‑home buyers
Economist Shamubeel Eaqub says the diverging views inside National reflect a broader shift in New Zealand politics, as parties are forced to pick between older, asset‑rich homeowners and younger generations locked out of the market.
“I think this is the transition to the way that any political party has to navigate the current environment,” Eaqub told Stuff. “It doesn't matter if you're left or right. Being young in New Zealand means that homeownership is hard and if you keep on running a party for boomers, you will die.”
He sees Bishop as part of a newer generation within National that understands the party’s long‑term survival hinges on making housing more attainable.
“What I see with Bishop is a housing minister that's continuing something that was started under Phil Twyford,” Eaqub said. “We've had three housing ministers that have largely pursued the same kind of housing policies, and within the younger part of the national caucus and National Party, that's exactly what they want to see.”
Breaking with National’s traditional ‘high house price’ mindset
Historically, National’s leadership has been closely aligned with the interests of existing property owners and rising asset values. Bishop’s openness to falling prices is a clear break with that tradition.
Former National Prime Minister John Key underlined the old orthodoxy in a 2024 speech to business leaders, arguing that the “core of what’s wrong” with the economy was falling house prices.
Many long‑term investors and older homeowners still see price growth as the benchmark of success. Younger clients, however, are more focused on access and sustainability – and increasingly sceptical that ongoing capital gains can solve broader economic challenges.
Voter attitudes: From “all for me” to “we have a problem”
Eaqub points to survey data showing a shift in public attitudes, even among older New Zealanders.
“If you look at the Ipsos survey on housing attitudes, you'll see, even amongst older people, there is a growing awareness that something's not right in the housing market in New Zealand," he told Stuff. “That narrative has really matured from one going ‘all for me and not for anybody else’ to going, actually, ‘there is a societal problem, and we should do something’.”
Outlook to 2026: Modest moves rather than a new boom
Looking ahead to the 2026 general election, the Reserve Bank is not expecting a strong price rebound. Its latest forecasts point to a 0.3% fall in house prices over this calendar year.
Economists remain divided on whether rising house prices are “good” for the economy.
Westpac Chief Economist Kelly Eckhold told RNZ in August that rising house prices are generally associated with nominal growth and a wealth effect for existing owners.
“When house prices are rising, people who have houses generally feel a bit richer, so they spend a bit more than they otherwise would, that's obviously positive for the economy in a cyclical sense,” Eckhold said.
Others, such as Infometrics chief forecaster Gareth Kiernan, argue that leaning on higher house prices as a growth strategy is “short‑sighted”. Kiernan warns it reduces homeownership and risks pushing more people overseas as they are priced out of the market.
National’s internal tug‑of‑war is likely to linger
Heading into 2026, Eaqub expects the tension within National to continue between the traditional, homeowner‑focused wing and the newer cohort worried about affordability.
“I think you will find the leadership will remain very focused on trying to appease the base, and that's what we've seen with Luxon," he said. "I mean, essentially, everything he talks about is very traditional, old school National messaging.”
“Bishop is a much more astute politician than people who speak to their base and to themselves rather than to future voters.”
Eaqub describes what’s emerging as a “little bit of a splinter”, but does not expect “substantial” policy change in support of young people in the near term, Stuff reported.
What this all means for mortgage advisers
For mortgage professionals, the political and generational split over house prices isn’t just background noise – it shapes client expectations and the regulatory risk landscape.
Key takeaways for your practice:
- Prepare for more clients – especially younger ones – who expect government to back lower or at least flatter prices.
- Help older clients understand that “modest” price growth, rather than boom‑and‑bust, is increasingly the policy goal.
- Factor in softer rent and price growth assumptions when modelling investor cashflows.
- Use the current correction to encourage would‑be first‑home buyers to get “transaction‑ready” in case further easing or policy sweeteners appear before 2026.
The politics of property are shifting. Advisers who can translate that into clear, tailored guidance for both existing homeowners and aspiring buyers will be better placed as New Zealand works through its generational housing reset.
Stay informed with the latest housing market trends and mortgage insights — subscribe to our free daily newsletter.
