Prices steady nationally, records set in the south, while Auckland and Wellington drag
New Zealand's housing market is holding together nationally, but the numbers underneath tell a more divided story.
REINZ data for May 2026 shows the national median sale price rose 1.3% year-on-year to $775,000, with days to sell unchanged at 47 days. Sales volumes fell 12.6% compared with May 2025, though that comparison carries an asterisk: last year's figures were buoyed by post-OCR-cut momentum that no longer applies.
"The May REINZ housing data supports our view that the housing market remains relatively dormant," ASB economist Wesley Tanuvasa said, noting that house prices "have generally remained stagnant over the last 12 months."
Westpac senior economist Satish Ranchhod, meanwhile, noted that "prices have been tracking sideways for several years now" and that sales have fallen nearly 13% over the past year, "with lower activity seen right across the country."
The House Price Index — a more reliable measure of underlying value trends than the median — tells a consistent story, down 0.6% annually and 1.7% over three months nationally.
South Island outperforms as records fall
Canterbury and Southland are carrying much of the national result. Canterbury hit an equal-record median of $725,000, up 6.6% year-on-year, with a one-year HPI of +3.0% — the second strongest nationally. Southland went further still, to a record $540,000, up 10.2% year-on-year, and the highest one-year HPI nationally at 5.8%. Invercargill City also set a new all-time record at $540,000. Sales above $1 million, once rare in Southland, are becoming increasingly frequent.
Both banks attributed lower South Island resilience to the strength of the broader regional economy. ASB noted that "the South Island is clearly outperforming the North, supported by a strong recovery in regions supported by the external sector," while Westpac pointed to "the broader firmness in economic conditions" in Canterbury, Otago, and Southland as the driver of price gains.
Canterbury's inventory sits at just 13 weeks — two weeks below the same time last year — and Southland at 10 weeks, five weeks below, pointing to genuine supply tightness underpinning price strength in both regions.
Auckland and Wellington under pressure — and the outlook diverges
North of the South Island, the picture shifts considerably. Auckland's median edged up 2.6% year-on-year to $1,005,000, but the HPI tells a different story — down 2.0% annually, with Days to Sell at 48 days, its highest since 2020. Wellington's median fell 2.8% to $770,000, with the HPI down 3.3% annually — the weakest major region nationally. Wellington salespeople noted that buyer sentiment during May was further weighed down by the pre-Budget announcement of significant public sector job reductions, a factor unique to the capital.
Despite weak house price growth in both cities, rental yields in Auckland and Wellington remain relatively low, suggesting rents are falling faster than prices — a dynamic that complicates the investment case for property investors considering new purchases in those markets and warrants a careful conversation about yield versus capital growth expectations.
On the national outlook, the two banks diverge in a way that matters for broker client conversations.
ASB retains its view that the housing market "will remain broadly flat over 2026, particularly given the near-term shadow that the Middle East cost shock casts."
Westpac is more cautious, forecasting nationwide house prices to fall nearly 1% over 2026, with only limited price increases expected in 2027. Ranchhod noted that "with borrowing costs pushing higher in recent months, we expect the housing market will remain soft over the remainder of this year."
That caution is visible in the data.
"There is plenty of choice for prospective buyers and they are taking their time," Tanuvasa said.
For brokers, the message is simple: region matters more than ever heading into winter.
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