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House Price Predictions 2026 & 2027

Bank economists predict 2-5% house price growth for 2026. They predicted 7-10% for 2025 and were wrong. Our guide explains what actually drives New Zealand house prices.
Updated 27 December 2025

Summary
  • Bank economists are predicting modest house price growth of 2-5% for 2026. However, these forecasts have been consistently wrong – in early 2025, some banks predicted 7-10% growth, which never materialised.
  • Regional variation is significant – there is no single "New Zealand house price story." Auckland and Wellington remain weak, while Canterbury, Otago, and Southland have seen modest gains. However, the costs of owning properties continue to increase - rates bills, insurance costs, maintenance and repairs only ever seem to go up.
  • Housing inventory is at a 10-year high, creating a buyer's market in most areas.
  • Net migration has dropped off since its 2023 peak, removing a key source of demand.
  • Warning: Bank forecasts and 'industry experts' should be treated as marketing, not independent analysis. Banks and related parties profit from mortgages – their largest revenue source – so they have a commercial interest in encouraging property purchases.
  • Know This: House price predictions from banks and property companies are not peer-reviewed research. They are public communications from profit-driven organisations. Treat them accordingly - their motivation is to sell houses, approve mortgages, and profit year after year. ​
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Our guide outlines:
Three Things to Know Before Reading This Guide:
  1. National predictions are useless - There is no single "New Zealand house price." Auckland townhouses, Wellington standalone homes, and Christchurch new builds move on completely different factors. Research your suburb, not the national average.
  2. Bank forecasts serve bank interests - Mortgages are their biggest profit driver. Optimistic predictions encourage borrowing. Treat them as marketing, not analysis.
  3. Affordability beats timing - If a purchase only works when prices rise, you're speculating, not buying a home. Interest rates, DTI limits, insurance and rates bills determine whether you can actually afford it,  not what prices do next year.

Warning - Bank house price forecasts have been consistently wrong in recent years:
Year
Early Forecast
​Actual Outcome
2023
5-6% growth predicted
​Prices fell
​2024
​3-5% growth predicted
Prices flat
2025
​5-10% growth predicted (some banks)
​Prices flat to slightly negative
Know This: In early 2025, ASB predicted prices could lift 10%. The actual result was that, nationwide, they were flat - a massive miss and well below inflation. Our view is simple - when economists, experts and forecasters are consistently wrong in the same direction (too optimistic), it can suggest systematic bias.
MoneyHub Founder Christopher Walsh Explains Why Bank and Property Industry House Price Predictions Should Be Viewed With Scepticism:

"The New Zealand media routinely publishes house price forecasts from bank economists as if they were impartial academic research. They are not. There is a conflict of interest - Bank economics teams are not independent research bodies. Instead, they are departments within companies legally obligated to maximise shareholder returns. When ANZ, ASB, BNZ, or Westpac publish house price predictions, those predictions arguably serve the bank's commercial interests.

Consider the business model:
  • Mortgages are the banks' largest lending product and a primary profit driver
  • Higher house prices = larger mortgages = more interest income
  • Bullish predictions encourage potential buyers to act rather than wait
  • Optimistic forecasts support existing borrowers' confidence in their purchase decisions

It may sound cynical, but asking most bank economists about house prices is comparable to asking oil company scientists about climate change – they may be credentialed professionals. Still, they work for organisations with clear financial interests in the outcome. If prices fall, the argument will likely be to "buy now"; if prices are high, it can be "buy now as they keep going up". Whatever the reality, agents want homes sold.

Real Estate agents spin market conditions with phrases such as "seeing signals of growth", "shortage of quality stock" and "experiencing growing buyer interest" which mean nothing. However, MoneyHub is well aware of numerous properties that are listed but not selling, and in early 2026, the number of houses sitting for sale was at record highs, per this interest.co.nz study.
Christopher Walsh
MoneyHub Founder

Who Makes House Price Predictions?

The Reserve Bank of New Zealand publishes house price data and forecasts as part of its Monetary Policy Statements. While not perfect, these forecasts come from an institution without a direct commercial interest in higher house prices and historically have been more conservative than most bank predictions in recent years. 

Property data companies like Cotality (previously known as CoreLogic) and REINZ also publish forecasts and time forecasts, though these organisations serve the property industry and may have their own potential biases when it comes to predictions.

Know This: Real Estate blogs, Reddit posts, property investment companies and various other interested parties also make house price predictions throughout the year. No forecast should be treated as fact - please use predictions as one input among many, and always consider the source's incentives. 

What the Banks Are Currently Predicting

Despite our concerns about bias, it's useful to know what the banks are saying – if only to understand the narrative being pushed in media.

Important: We don't link to bank housing reports – linking would drive traffic and boost their trust for content we consider marketing, not research. Search "(bank name) + house price predictions" if you want to read them.​

Our view:
  • These forecasts are for national averages; they do not take into account the significant regional variation that actually matters to buyers and sellers.
  • These same institutions predicted 5-10% growth for 2025 and were dramatically wrong.
  • Past performance suggests these forecasts should be treated as, at best, optimistic scenarios rather than likely outcomes.

Our View on Future House Price Increases

Our view is deliberately conservative:
  • While modest house price increases are possible in some regions over the next few years, we do not believe New Zealand is returning to the pre-COVID era of broad-based, rapid house price growth driven by falling interest rates and expanding leverage.
  • The conditions that fuelled the 2012–2021 boom no longer exist - there are DTI limits, net migration is weaker and more volatile, townhouses and apartments are flooding the market all while ongoing house ownership costs (rates, insurance, maintenance) continue to rise faster than wages.

Our expectation is low to modest nominal price growth at best, with:
  • Flat or weak outcomes in oversupplied markets
  • Better resilience in scarce, high-quality locations
  • Long periods where prices fail to keep up with inflation

In real (inflation-adjusted) terms, many homeowners may see little or no genuine wealth creation for several years.

Our bottom line:
  • Consider buying a home to live in if you can genuinely afford it and plan to stay long-term
  • Do not rely on capital gains to justify overstretching - it's a brutal market right now, and we expect capital gains to be limited in the future
  • Be highly sceptical of anyone promising a “return to normal” price growth
  • New Zealand house prices may rise again - but the era of the "property Ponzi" and the wealth creation is likely over.

Important: Why trust MoneyHub? Are you selling housing or working with the real estate industry?

  • ​MoneyHub is focused on providing comprehensive consumer comparisons and objective information. Our website helps millions of New Zealanders make better financial decisions every year with information they can rely on.
  • Our expert team rigorously researches every resource we publish. We neither sell or broker home loans,  nor do we encourage readers to take out a loan, buy an investment property, personal loan or anything else.
  • While MoneyHub sometimes may earn a commission from specific partners on offers and links, we create all our resources to help New Zealanders save and invest more and spend less while minimising debt costs.
  • Overall, our continued focus is to help every New Zealander make the most informed personal finance decisions.

The Regional Reality – There Is No Single "New Zealand" Housing Market or House Price Prediction

We believe national house price statistics are meaningless for individual decision-making. Specifically:
  • New Zealand has multiple distinct housing markets, each driven by local employment, migration, supply, and demographic factors.
  • For example, what happens in Auckland differs from what happens in Dunedin and Christchurch - to explain this better, we outline the key considerations for each region below.

1) Auckland
Auckland prices remain well below the 2021 peak. The market is characterised by:
  • Oversupply of townhouses – Developers built thousands of medium-density homes that aren't selling. Some developments have sat unsold for 2-3 years. There is also significant growth in Simplicity Living's 'build-to-rent' apartment rollouts in key areas.
  • Quality standalone homes in good school zones still command strong prices, but townhouses have been built in record numbers, suppressing prices.
  • A "K-shaped" market – desirable family homes in established areas that hold their value far better than struggling townhouse developments, where pricing is untested.
  • Population outflows – Auckland is losing residents to other regions and Australia per recent StatsNZ data.

2) Wellington
Wellington has experienced the sharpest decline of any major centre:
3) Canterbury/Christchurch
Canterbury is a relative bright spot:
  • Prices essentially flat compared to the 2021 peak per recent data
  • Population growth from internal migration (people leaving Auckland, other cities and moving to Christchurch per this Stuff.co.nz article tracking multiple years)
  • Christchurch offers far more affordable entry points compared to Auckland for first-home buyers
  • The city has growing infrastructure and amenities

4) Regional Towns
Smaller regional centres present a mixed picture:
  • Towns with diversified employment are holding value
  • Areas dependent on single industries (farming, forestry) face risks
  • Some towns have properties sitting unsold for 12+ months as vendors refuse to meet the market
  • Queenstown and Wanaka are two areas that have benefited from lifestyle migration, strong tourism and demand, although fast-tracked projects may depress house prices

Know This: Before making any property decision, research your specific suburb and street. A "national average" prediction tells you nothing about whether a particular property in a particular location will gain or lose value. ​

Should You Buy a Home Now or Wait (As a First-Home Buyer)?

  • ​Buying your first home is one of the biggest financial decisions you'll make, and timing plays a critical role. High mortgage rates, as seen throughout 2023 and for most of 2024, can significantly strain household finances - many New Zealanders have struggled under these conditions, as highlighted in this 2024 story from RNZ.
  • However, waiting for interest rates to drop also has risks. Lower rates often fuel demand, driving up property prices. The savings from reduced interest repayments could be offset by a larger purchase price, leaving you in the same financial position - or worse.
  • Know This: If you're financially ready and can afford the repayments at current rates, buying a home now can provide stability and allow you to start building equity. However, if the current market stretches your budget too thin, waiting and focusing on growing your deposit or improving your affordability are both proven ways to prepare for home ownership. 

How to Find the Best Mortgage Rate

New Zealand has expensive housing, so it's essential to lock down the best mortgage terms if you're a first-time home buyer or remortgaging. We suggest talking to a mortgage broker well in advance to lock in a competitive deal early. You may also want to explore tailored options like offset, revolving and floating or fixed mortgages if there's a benefit to your situation for using these.

Important Factors That Influence House Prices

Rather than relying on bank predictions and those of self-promoting experts who are enthused about housing as an investment, understanding the underlying drivers helps you form your own view.

Interest Rates

Lower interest rates typically support house prices by:
  • Reducing mortgage servicing costs
  • Increasing borrowing capacity
  • Making property more attractive relative to term deposits

​The OCR has fallen materially since late 2023 (where it was as high as 5.50% in late 2023). However, longer-term mortgage rates – which matter more for house prices – haven't fallen as dramatically. This is why the expected 2025 price recovery didn't materialise. Our guide to interest rate predictions explains more. 

Migration

New Zealanders are leaving in record numbers (as outlined in this 1news.co.nz feature in November 2025), and lower net migration represents:
  • Fewer people needing housing
  • Less competition among buyers
  • Reduced rental demand (which affects investor returns)

While New Zealanders continue leaving for Australia at elevated rates, fewer skilled migrants are arriving due to tighter visa policies and a weak job market. This means there is less demand to buy homes overall, which explains the housing market conditions observed.

Employment

Without jobs, people cannot get mortgages. The unemployment rate has risen and, for the most part, held steady. However, each percentage point of unemployment represents:
  • Tens of thousands of households with reduced or no income
  • Reduced confidence among those still employed
  • Forced sales from those who cannot service mortgages

Housing Supply

The supply picture is complex and varies significantly by region and dwelling type.

Building Consents – The Numbers:
After falling sharply in 2023 and 2024, building consents have started to recover. September 2025 saw 3,747 new dwelling consents issued nationally per StatsNZ data – up 27.3% compared to September 2024 and the highest monthly figure since November 2022.

However, this recovery is uneven:
  • Standalone houses: Up 16.2% year-on-year
  • Apartments: Up 57.4% year-on-year
  • Townhouses/units: Up 49.8% year-on-year
  • Retirement village units: Down 61.4% year-on-year

The Unsold Inventory Problem:
Despite lower new construction, the market still has a significant overhang of unsold inventory from the 2021-2023 building boom – particularly townhouses in Auckland. Available housing stock was at a 10-year high in many areas per this interest.co.nz story from early 2025​, which continues to suppress prices regardless of new consent numbers.

Our View: Drive around Auckland, and you will see a handful of For Sale signs outside most recently completed townhouse developments. The supply far exceeds demand, so pricing is uncertain.

Regional Differences:
Supply pressures vary dramatically by location:
  • Auckland: Oversupplied with townhouses, undersupplied with quality standalone homes in desirable areas
  • Wellington: Slower development activity, but less demand pressure due to population outflows
  • Canterbury: More balanced supply/demand, with continued greenfield development
  • Regional towns: Variable – some have housing sitting unsold for months, others have genuine shortages

RMA Reforms

The Government's Resource Management Act reforms could significantly impact housing supply over the medium to long term - this RNZ article explains what you need to know.

Key proposed changes include:
  • New legislation to replace the RMA
  • A shift to "permitted activities" – allowing development unless there's a specific reason not to
  • Streamlined planning between councils
  • Estimated 45% reduction in administrative and compliance costs

Land supply has been one of three key drivers of New Zealand house prices over several decades (alongside falling mortgage rates and favourable tax treatment). Opening up more land should, in theory, limit price growth and improve affordability.

However, changes will likely take years to take effect, political risk remains of changes in policy, and the Fast-track Approvals take time to translate to actual construction

Know This: Supply changes are slow-moving. Even significant regulatory reform takes years to translate into houses being built and sold. 

Debt-to-Income (DTI) Restrictions

The Reserve Bank's DTI restrictions limit how much buyers can borrow (relative to their income). This recent change means:
  • Even with low interest rates, borrowing capacity is capped
  • The 2020-2021 style price surge (fuelled by unlimited leverage) cannot repeat
  • Prices must be supported by actual incomes, not just cheap credit

Our guide to DTI explains what you need to know.

Government Policy

The current 2023 NACT government has:
Our View: A change of government in the next election (or the one after that) could reverse these policies, creating uncertainty for investors.
MoneyHub Founder Christopher Walsh's View on House Prices and Property Investment:
"The property industry – the media (via their property websites), agents, developers, property investment promoters and bank economists – has spent decades telling New Zealanders that house prices only ever go up. This narrative has been comprehensively disproven since 2021, yet the same voices continue making bullish predictions.

Please understand that buying a home to live in is fundamentally different from buying property as an investment. If you're purchasing a home for your family, where you'll live for 10, 20, or 30 years, short-term price movements matter far less than finding the right home at a price you can genuinely afford.

The narrative that everyone should borrow as much as possible to get into investment properties needs to end. The calculations simply don't work for most people:
  • Rental yields are typically 3-4% gross, far below mortgage rates.
  • This means investors are paying out of their own pockets, hoping for capital gains, but those capital gains have been negative for four years in many key New Zealand cities.
  • Meanwhile, investors face rising rates, insurance, maintenance costs, and compliance requirements - investment property can be a fast track to a life of negative cash flow.

Many people who bought investment properties in 2020-2022 are now underwater, subsidising their properties with their own wages, or being forced to sell at significant losses. You don't hear those stories at property investment seminars.

My view is simple - own your own home if you can afford to, avoid unnecessary debt, and be deeply sceptical of anyone telling you that leveraged property investment is a 'sure thing.'

For those with money to invest, there are many options beyond residential property – index funds, shares, managed funds, KiwiSaver, term deposits – that don't require taking on hundreds of thousands in debt or dealing with tenants and maintenance".
Christopher Walsh
MoneyHub Founder

What Could Push House Prices Up or Down?

No one knows what will happen. We outline the most obvious scenarios that can affect house prices.

What could support prices:
  • Migration turnaround – If New Zealanders stop leaving and arrivals pick up, demand returns. But right now, skilled New Zealanders continue to depart.
  • Further rate cuts – Cheaper borrowing helps, but 2025 proved that OCR cuts alone don't guarantee price growth. DTI restrictions now cap what people can borrow regardless of rates.
  • Economic recovery – More jobs and higher wages support buying, but economic development and growth are not shared evenly in New Zealand.
  • Pro-property policy – Interest deductibility is back in force, bright-line is shorter, and insurance increases appear to have stabilised.

What could push prices lower:
  • Continued exodus – Every family leaving for Australia is one fewer buyer and potentially one more seller.
  • Unemployment – Job losses force sales - unlike interest rates, the Reserve Bank can't just fix this, and there is a long tail from interest rate change to positive effects being felt in the job market.
  • Forced sales – Developers sitting on unsold stock and investors bleeding cash can only hold on so long. Eventually, they sell at whatever price clears when their debt is due.
  • Global shocks – An Australian recession, China trade problems, US instability – any (or all) of these hit New Zealand hard and fast.
  • Rates going back up – If inflation returns, so do rate hikes. Those who stretched at current rates would be in trouble.
  • Policy reversal – New government, new rules. Ask anyone who bought an investment property in early 2021 how quickly settings can change.

Know This: Bank economists publish forecasts of rising prices. They rarely forecast falls – even when the evidence points that way. The risks above are real, they're just not discussed at property seminars or in media reports quoting bank economists.

Frequently Asked Questions Specific to Interest Rates, House Prices and Mortgage Costs

Interest rates are a significant factor to affording a home, and our guide to interest rate predictions explains more. We outline five popular queries below:

​What does an OCR increase mean for first-home buyers?

An OCR increase generally leads to higher mortgage rates, making home loans more expensive and reducing the borrowing capacity of first-home buyers. A high OCR usually means it's harder to afford a property, but it may also slow house price growth, creating opportunities for those with larger deposits or lower borrowing needs. The reality is it depends specifically on the property and area you plan to buy in, as many factors are at play.

Should I fix my mortgage if interest rates are expected to rise?

If interest rates are predicted to rise, fixing your mortgage at current rates can protect you from future increases. However, you need to consider the fixed rate term and the likelihood of rates stabilising or falling in the longer term. Many New Zealanders missed the entire 'low-interest period' from 2020 to 2023 by fixing it for five years, from 2018 to 2019. Fixing for one year is worth considering to keep options open, or you can apportion your mortgage into different fixed terms. Our guide to interest rate strategies explains more.

What happens to my mortgage if interest rates rise after I've fixed my rate?

If you're on a fixed-rate mortgage, your repayments remain unchanged until your fixed term ends. When refinancing, you may face higher rates, increasing your monthly repayments. It's best to be aware of current home loan interest rates so you can make an informed decision when renewing.

Should I wait to buy a house if interest rates are predicted to drop?

You cannot time the market, but it's understandable to want to wait, which could save you money if rates drop significantly. While lower rates may reduce borrowing costs, house prices could rise during the same period, eroding potential deposit savings.

Can interest rate changes affect how much deposit I need for a home?

OCR changes indirectly influence deposit requirements by impacting house prices. When rates are low, rising prices may require larger deposits, while higher rates can reduce prices, potentially lowering deposit requirements in a cooling market.

General Frequently Asked Questions about House Price Predictions

Should I wait to buy a house?

This depends entirely on your circumstances, not on house price predictions. If you:
  • Have stable employment
  • Have a deposit of at least 20% (or 10% for new builds with first-home buyer support)
  • Can afford repayments at current rates, plus a buffer that accounts for a rise in interest rates
  • Plan to live in the property for 7-10+ years
  • Have found a property you genuinely like in a location you want to live

...then the exact timing matters less than finding the right property at a price you can sustain.

If you're stretching to afford something, hoping for capital gains to bail you out and take off some of the pressure of financing the property, that's speculation, not home buying.

Warning: Please be careful, as many players in the housing industry want to move money from your bank account to theirs and don't care if you're loaded up with crippling debt in the long term.

Are house prices going to crash?

Prices have already fallen significantly – approximately 15-20% nominally and 31% in real (inflation-adjusted) terms from the 2021 peak. Whether you call this a "crash" is a matter of semantics.

A further large drop (say, another 20%) would require either:
  • A major economic shock (severe recession, banking crisis)
  • A sustained period of forced sales exceeding buyer demand (which could come from mortgagee sales driven by job losses, a significant sell-off of homes by investors facing cashflow problems and/or older New Zealanders down-sizing to later-life homes)

While nothing is impossible, it's more likely that there will be continued stagnation with regional variation.

Is property still a good investment?

Property is an investment, not automatically a good investment. Whether it's right for you depends on:
  • Your alternative options (what else could you do with that money?)
  • Your risk tolerance (can you handle being underwater, meaning you owe more to the bank than the property is worth, for years?)
  • Your time horizon (property, going forward in New Zealand, will typically need 10+ year holds)
  • Your cash flow (can you cover negative gearing from income?)
  • Your lifestyle (do you want to be a landlord? Our guide to the risks of investment property explains essential must-know facts).

Should I trust real estate agents' advice on when to buy?

Real estate agents are paid when properties sell. The boom finished a long time ago, meaning agents continue to tout for listings. Don't be fooled by their enthusiasm for the housing market's prospects - they have a direct financial interest in you buying. Their advice and 'expertise' should be treated accordingly.

This doesn't make them dishonest; their incentives are simply not aligned with yours. They want you to buy a house in the next month or so, not wait for a year for the best property to come along.

Our Conclusion

House price predictions from banks and property companies should be treated as marketing, not analysis. These organisations profit when you buy property and take out mortgages – their forecasts reflect this commercial interest.

The reality is:
  1. Nobody knows where prices will go – Anyone claiming certainty is either lying or deluded.
  2. Regional variation matters more than national averages – Research your specific area because that's what matters, not a national figure.
  3. Buying a home is different from property investment – Don't confuse the two - if you're looking to become a landlord as a wealth creation strategy, please read our must-know property investment considerations.
  4. The past four years have disproven "property always goes up" – Adjust your expectations accordingly because the next 20 years in New Zealand are, arguably, unlikely to mirror the 20 years pre-COVID due to the factors outlined above.
  5. Banks have been consistently wrong – Their predictions warrant scepticism, not headlines. Still, it makes the news because many New Zealanders own homes, and publications like OneRoof.co.nz drive revenue for NZME, which owns The Herald, and TradeMe, which lists property, has bought into Stuff Digital. In short, the more property is talked about/hyped up, the more it's "traded".

Know This: If you're buying a home to live in long-term, focus on finding the right property at a sustainable price rather than timing the market. Our guide to buying a home is a strong starting point.

If you're considering property investment, do the calculations honestly – including scenarios where prices remain flat or fall further – and compare with alternative investments that don't require leverage or landlording. There is no shortcut to wealth, and many property investors who have fallen for hype blasted out over recent years are now subsidising their tenants' rent with their own wages while capital gains stagnate. Rates, bills, and insurance costs always need to be paid. ​
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