New Zealand's housing market is in a peculiar state, and ANZ economists have a dire prediction. The market began 2026 with a whimper, and the experts don't foresee a quick turnaround.
ANZ New Zealand's economic team believes the housing market lacks the necessary momentum for a significant price surge this year. Their Property Focus report reveals that house prices have made a soft entry into 2026, and various factors are conspiring to keep the market subdued.
Here's the intriguing part: while the broader economy is on an upswing, with positive activity indicators and a recovering consumer confidence, a surge in housing supply and the looming election are throwing a spanner in the works. Add to that the anticipation of an increase in the Official Cash Rate, and you have a recipe for a stagnant housing market.
The report highlights that longer-term mortgage rates remain high compared to rental yields, indicating a lack of motivation for price hikes. And this is the part most people miss: despite the economy's overall improvement, the housing market's trajectory looks set to remain sluggish.
ANZ, as New Zealand's largest home lender, holds significant influence in the market. With nearly $114 billion in housing loans as of September 2025, their predictions carry weight. In a recent revision, ANZ economists slashed their 2026 house price inflation forecast to a mere 2%, down from 5%, and hinted that it might dip even lower.
But here's where it gets controversial: the report suggests a strategy for borrowers looking to refix their mortgages. It recommends considering a short-term fix now and then refixing for a longer term later in the year, based on the expectation of an OCR rise. However, ANZ economists caution that this approach could backfire if the economy recovers faster than anticipated, leading to earlier rate increases.
So, will the housing market fizzle out, or is there a spark of recovery on the horizon? What do you think? Share your thoughts below, and let's discuss the future of New Zealand's housing market.
