Sales keep sliding as investors turn cautious ahead of the election
New Zealand's housing market showed little sign of shifting gears in June, with property values slipping again and sales activity extending a run of declines that's now stretched to six consecutive months.
Buyers hold the advantage as values drift
Cotality's Home Value Index fell 0.2% nationally in June, continuing the flat trend that's defined 2026 so far. The picture wasn't uniform: Auckland and Wellington values kept drifting lower, while Christchurch and Hamilton edged up, and previously resilient markets like Invercargill and Queenstown recorded small dips that may prove temporary.
Cotality's Monthly Housing Chart Pack recorded 6,829 residential sales in June, down 4% on a year earlier and marking a sixth straight monthly fall, with sales over the first half of 2026 running 4.2% behind the same period last year.
Cotality NZ chief property economist Kelvin Davidson (pictured) said the shift in bargaining power has been stark.
"The balance of power has shifted. Buyers have options, time on their side, and in many cases the ability to negotiate harder than we've seen for several years," Davidson said.
He was careful to note it isn't a rout for sellers, either, telling RNZ: "We haven't seen a huge rise in unemployment, so there's not really a lot of forced selling going on."
Investors turn wary as expectations reset
Investor activity has softened for a second straight quarter, with mortgaged multiple-property owners, including smaller "mum and dad" investors, pulling back amid subdued rents, rising ownership costs and uncertainty over potential tax changes after the election.
"A potential capital gains tax is a concern for investors. But many are perhaps even more worried about the risk of interest deductibility being phased out again," Davidson said.
First-home buyers, by contrast, remain one of the most active groups in the market, continuing to take advantage of subdued competition to secure a larger share of deals.
That caution extends beyond investor-specific pressures to a broader recalibration of expectations. More buyers and owners are starting to question the long-held assumption that property values rise at a consistent 6% or so a year, a shift in mindset that could prove self-reinforcing by dampening demand further.
Outlook: more of the same
That reset in expectations is playing out against a shakier global backdrop, too. The initial US-Iran peace deal that had briefly eased mortgage rates and inflation fears has since broken down, with fuel prices climbing again and inflation risks tilting back to the upside.
The RBNZ has already lifted the OCR from 2.25% to 2.5%, with scope for further increases toward a neutral rate near 3% expected to keep a lid on housing momentum over the coming months.
Davidson doesn't see an obvious trigger for a turnaround.
"There's no obvious catalyst for a sharp turnaround at present. With listings still elevated and economic uncertainty lingering, we expect market conditions to remain relatively subdued through the second half of the year," he said.
Stay informed with the latest housing market trends and mortgage insights — subscribe to our free daily newsletter.
