NZ's property market is firmly in buyer territory with prices still falling
New Zealand's residential property market remains decisively tilted towards buyers, with auction attendance down and investor appetite at persistently weak levels, according to the latest NZHL Property Report by independent economist Tony Alexander (pictured).
The May 2026 survey drew 231 responses from licensed real estate agents nationwide. While conditions showed marginal improvement from the previous month's survey lows, the overall picture remains one of a market under pressure, with the balance firmly weighted against sellers still struggling to recalibrate their expectations.
Prices falling for the fourth month running
A net 37% of agents reported that prices are falling in their area — only a slight improvement from the net 44% who said the same a month earlier. The REINZ House Price Index has declined over the past two months, and agents suggest further modest falls are likely in the short term.
The April REINZ House Price Index confirmed the trend, falling 0.4% in seasonally adjusted terms across most regions. ANZ has since revised its 2026 house price forecast to a 2% fall, citing weakening confidence, rising mortgage rates, and geopolitical uncertainty.
Against that backdrop, auction attendance also remains subdued, with a net 23% of agents reporting reduced turnout, down from a net 40% last month but still reflecting a market where buyers have backed away amid concerns about interest rates and offshore economic developments.
Open home attendance tells the same story, with a net 34% of agents reporting reduced numbers.
The buyer mindset is increasingly calculating. Agents note that purchasers have become highly selective, favouring well-presented properties with no issues and walking away from anything requiring work or where vendors remain anchored to 2021 price expectations.
Fear of overpaying replaces FOMO
Fear of missing out has given way to its opposite. Just 10% of agents reported buyers displaying FOMO — up from an eleven-month low of 5% last month, but still negligible.
Meanwhile, fear of overpaying has surged sharply, with 45% of agents noting buyer concern about prices falling after purchase, compared with just 21% before the Iran War began at the end of February. Interest rate anxiety is the single biggest buyer concern, flagged by 52% of agents — up from just 2% in October.
Investors stay on the sidelines
First-home buyers continue to show up, with a net 29% of agents reporting increased activity from that cohort — a steady trend running since early 2023.
Investors, however, remain largely absent. A net 35% of agents reported reduced investor buying interest, with agents citing higher holding costs, difficulties finding quality tenants, and lingering concern about further tax changes as the main deterrents. Almost half of all agents said nothing was motivating investor demand — with bargain-hunting the only factor drawing any buyers from that group at all.
One bright spot: a handful of agents noted a pickup in enquiries from Australia following that country's recent federal budget tax changes, alongside some increased interest from Kiwis offshore considering a return home.
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