Source: Cotality
Sales volumes have fallen again across New Zealand’s housing market, extending a slow start to 2026 even as property values remain broadly stable on the back of improved affordability and lower mortgage rates.
The Cotality NZ Monthly Housing Chart Pack for March shows sales volumes in February were 6.8% lower than the same month a year ago, following a 7.8% fall in January. It marks the first time in almost three years that sales have declined in two consecutive months.
Property values remain relatively stable, with the national median edging 0.2% higher in February, although values are still 1.2% lower than a year ago and around 17.3% below the early-2022 peak.
Cotality NZ Chief Property Economist Kelvin Davidson said buyer caution had remained a defining feature of the country’s broader housing market through the first two months of 2026.
“Sales volumes remain fairly sluggish and that’s a reminder that confidence takes time and is still rebuilding,” Mr Davidson said.
“December activity looked unusually strong, so some of the recent softness may reflect timing rather than a new downward trend. But even allowing for that, the housing market is still in a phase where buyers are taking their time.”
Some markets showed larger price gains in February, with Hamilton and Dunedin each recording a 0.9% rise in values, while values in Invercargill also moved higher.
First home buyers remain key market force
First home buyers continued to play a major role in the market, accounting for around 27% of property purchases across January and February combined.
Mr Davidson said improving affordability and lower mortgage rates are helping many first home buyers enter the market, even in a high-priced market such as Auckland.
“First home buyers remain a significant presence, and in Auckland they’ve taken an even larger share of purchases at around 30% so far this year,” he said.
“KiwiSaver withdrawals continue to play a role in helping buyers assemble deposits, while the banks’ low-deposit lending allowances are also supporting access to credit.”
“In some cases, mortgage repayments can now look similar, or cheaper than rents, which can encourage tenants to move from renting to buying if they’re able to save for or access a deposit,” he said.
Movers accounted for just over 26% of purchases across the first two months of the year, while mortgaged multiple property owners held a 24% share.
Mr Davidson said the behaviour of owner-occupiers trading homes would be an important factor to watch through 2026.
“A stronger economic backdrop could encourage more movers to return to the market over time. When that group becomes more active, it tends to support higher transaction levels across the entire housing market.”
Rental market remains subdued
Conditions in the rental market remain soft, with net migration well below previous peaks and rental listings still relatively elevated.
MBIE bonds data shows the median national rent fell by 0.8% in the three months to January compared with a year earlier, a relatively rare outcome after several years of strong growth.
Mr Davidson said the combination of softer population growth and already high rent levels relative to incomes is limiting further increases.
“Rents have already risen significantly in recent years, and wage growth has eased, so there isn’t a lot of scope for further increases at the moment,” he said.
“More likely we’ll see a period of flat or only modest rental growth while the market adjusts.”
Market outlook remains measured
Several economic and financial factors would influence how the NZ housing market performs during the rest of 2026, Mr Davidson said.
Around 59% of existing mortgages by value are due to be repriced over the next 12 months, which could provide some relief for households if borrowers move onto lower interest rates. However, global uncertainty and inflation pressures continue to pose unknown risks.
“The US-Israel-Iran conflict and higher fuel prices are potential inflation risks in the near term, but if those pressures prove temporary the Reserve Bank should still be able to hold the OCR steady,” he said.
“That would allow the housing market to gradually rebuild momentum, although any recovery in prices and sales volumes is likely to remain modest rather than rapid.”
The Cotality NZ Monthly Housing Chart Pack provides the latest breakdown of sales activity, listings, buyer classification, property values, rental trends, lending conditions and economic indicators across New Zealand.
