Sentiment has collapsed since March, but falling price expectations are triggering action, not paralysis
New Zealand's national average asking price slipped 2.5% in May to $833,800, though on a year-on-year basis the market is essentially flat at -0.2%. The calm surface, however, conceals a market pulling hard in two directions.
"That national number looks calm on the surface, but underneath it there's real divergence,” Trade Me Property customer director Gavin Lloyd (pictured) said. “Whether you live in the north or south island, a main centre, or more regionally, the data paints quite a different picture."
The regional split is pronounced. Auckland is down 2.1% year-on-year and Wellington off 6%, while Southland surged 10.2%, Canterbury gained 3.3%, and Bay of Plenty rose 4.1%. Excluding Auckland, the national index is actually up 0.7% — a figure that tells a materially different story for brokers working outside the main centres.
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Sentiment shift: optimism halved in two months
The more striking finding is in consumer sentiment. Trade Me's Winter Pulse survey of nearly 2,000 New Zealanders found the share expecting prices to rise over the next 12 months fell from 46% in March to just 29% in May — a drop of 18 percentage points in two months. Those anticipating price falls nearly tripled, climbing from 6.5% to 16%.
Lloyd described the speed of the reversal as significant: "In March, nearly half of those surveyed expected prices to rise, but by May that optimism faded to fewer than three in ten. This is the sharpest drop in some time."
On the seller side, the number of active sellers — those currently listing or planning to within six months — rose 3%. That supply pressure has a broader context — active listings nationally hit a decade high of 37,500 in March, up 2.1% year-on-year, according to the Ministry of Housing and Urban Development's March Quarter 2026 Housing Market Update.
Confidence in the timing of a sale fell close to five percentage points. Lloyd noted the compounding effect: "Listings on Trade Me Property remain strong, and naturally with more supply entering the market during a period of softening seller confidence, this places further downward pressure on price expectations."
Buyer intent up — and first-home buyers leading the charge
The Trade Me survey shows active buyer intent up 6% from March and first-home buyer share of active buyers rising a further 3% over the same period.
The Cotality-Westpac First Home Buyer Report corroborates that trend — first-home buyers made up 27.5% of all purchases in Q1 2026, just below the record of 28.2% set late last year, purchasing around 24,800 properties in the past 12 months, the highest annual tally since Q3 2021.
Notably, investor participation fell 3% — a signal that the current pipeline is being driven almost entirely by first-home buyers and owner-occupiers, with direct implications for the loan structures, LVR profiles, and property types brokers are likely to be structuring right now.
With the RBNZ's next OCR decision due 8 July, and rate increases now widely forecast, any further tightening in borrowing conditions could test how much of that buyer intent converts to committed applications before winter deepens.
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