NZ property market steady as looser LVRs and easing construction costs set stage for 2026 rebound
New Zealand’s property market is holding firm, with sales volumes trending upward and values remaining largely flat, according to Cotality’s October Housing Chart Pack.
After a small dip in August, September’s sales volumes rose again – up almost 4% year-on-year and marking the 27th rise in 29 months since the 2022-early 2023 downturn.
Spring has also brought a lift in new listings, although overall housing stock remains around 12% lower than the same period last year.
Despite this modest recovery, values are still subdued, with Auckland and Wellington recording small monthly declines.
“Buyers are enjoying conditions,” says Cotality economist
Cotality chief property economist Kelvin Davidson (pictured) said the data suggest a market that is “stabilising with conditions still tilted in favour of buyers.”
“For now, property buyers are enjoying conditions. In particular, first-home buyers are showing strong momentum with around 28% of activity in September, setting a new monthly record,” Davidson said.
“And with the LVR rules set to loosen from 1 December, there may be further opportunity for them to take advantage.”
Davidson said the change would support flexibility for lenders without sparking a new housing surge, noting that “banks and borrowers, at least on the owner-occupier side, are already operating well below the current limits.”
Investors still constrained despite looser rules
The outlook is more complex for investors, who continue to face tight restrictions on low-deposit lending.
“For investors, it’s currently much more difficult to secure low deposit finance,” Davidson said. “Even so, other credit restraints are still in place, such as the debt-to-income ratio limits and banks’ own internal serviceability tests. Hence, although they’re already on the comeback trail, a fresh surge in investor activity off the back of looser LVRs seems unlikely.”
He added that overall, “the property market is largely tracking sideways for now – neither booming nor falling sharply.”
2026 outlook improving amid easing inflation, lower costs, and rate cuts
Davidson said market fundamentals are gradually improving, with affordability lifting, fewer listings, and interest rates trending down as existing borrowers reprice onto lower market rates.
“With affordability improving slightly, listings lower than last year, more existing borrowers repricing loans down to market interest rates, and the unemployment rate set to drop next year, 2026 may look stronger for both property sales volumes and values,” he said.
Key data from Cotality’s October 2025 Housing Chart Pack
- NZ’s housing stock value: $1.65 trillion.
- Cotality Home Value Index: +0.1% in September, −0.7% over the quarter.
- Sales volumes: 88,731 over the 12 months to September.
- Active listings: 27,565 in early October – still elevated but down year-on-year.
- Gross rental yields: 3.8% – the highest since mid-2016.
- Inflation: Back within the 1-3% target band; the RBNZ continues its easing cycle.
- Buyer classification: First-home buyers record 28% of national purchases; investors regain 24.6% – the highest since early 2021.
- Regional highlight: In wider Wellington, first-home buyers made up 36% of purchases in the September quarter – the highest share among major centres.
Market stabilisation continues despite limited stimulus
For mortgage advisers, the message from Cotality’s latest report is clear: the market remains balanced and resilient. While RBNZ’s LVR easing and slower construction cost growth may provide a mild lift for confidence and affordability, tight DTI limits, subdued investor yields, and elevated borrowing costs will keep overall momentum contained. Broader growth drivers – interest-rate easing, labour market recovery, and construction stability – are expected to shape the next meaningful upswing in 2026.
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