ANZ tips flat values but cheaper mortgages tempt refinancers
New Zealand’s housing market has stumbled into 2026, with fresh ANZ analysis suggesting another subdued year for prices despite clearer signs of economic recovery.
ANZ’s latest Property Focus report says national house prices have had “a soft start to the year and continue to show little momentum,” after the REINZ house price index “edging down in January and sales volumes lower.”
The bank last month cut its 2026 house price inflation forecast from 5% to 2% and now sees risks skewed to an even weaker outcome as the year unfolds.
ANZ’s caution lands as New Zealand heads into an election year with RBNZ on hold at 2.25%, and markets debating when the next OCR hike will hit borrowers.
Adjusted for seasonality, the REINZ index slipped 0.2% in January, leaving prices “flat or falling for eight of the last nine months, with a trend rate of decline of about 0.5% per quarter over that period.” Auckland and Wellington remain the soft spots, while parts of Southland and Otago are still seeing gains, underscoring the increasingly regional nature of the market.
Recovery tailwinds meet powerful housing headwinds
ANZ’s economists note that the broader economy is “turning the corner”, with high‑frequency indicators robust and consumer confidence returning to more normal levels. Net migration is also “tentatively rising from its low point” and rents on new tenancies have begun to stabilise after last year’s dip.
Even so, those supports are being outweighed by “strong housing supply, the prospect that the next move in the OCR is up rather than down, and uncertainty arising from the election later this year.” ANZ’s flat‑price call arrives just as net migration starts to lift, construction remains strong, and the RBNZ keeps signalling its next move on rates is likely higher.
Inventory remains elevated, with a steady stream of new listings keeping the market well supplied. Sales‑to‑inventory ratios and auction clearance rates both “point to largely flat prices in the next few months,” reinforcing the view that there is “nothing to suggest prices will rise in the immediate future.”
Borrowers eye the ‘sweet spot’ on fixed rates
On the interest rate front, the Reserve Bank kept the official cash rate at 2.25% this month and signalled an extended pause, but still projects one hike late in the year. ANZ agrees the “next move is more likely to be up than down” and expects tightening to come “more quickly than the RBNZ is currently forecasting” once it begins.
For borrowers, ANZ highlights the 18‑month to three‑year part of the mortgage curve as the current “sweet spot”, with most fixed rates out to two years now below 5% but longer terms still significantly higher. With mortgage rates expected to stay under 6% “for the foreseeable future”, the bank argues that 2026 is shaping up as another year of limited price growth rather than a renewed boom.
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