New Zealand’s residential market in 60 seconds

The New Zealand housing market remained broadly neutral over the past month. House prices reduced slightly but continue to move broadly sideways, while sales activity during June was relatively soft.

The softer result appears partly linked to the conflict in the Middle East and the resulting oil shock. Higher oil prices and wider economic uncertainty added to cost-of-living concerns and contributed to a more cautious tone among buyers and sellers.

Our latest agent sentiment survey points to mixed but largely neutral conditions. Sentiment is showing pockets of negativity, although this appears to reflect short-term uncertainty rather than a clear shift in the underlying direction of the market.

Performance across the country remains uneven. The South Island is generally performing better than the North Island, supported by the strength of the agriculture and tourism sectors. Ongoing internal migration into parts of the South Island is also helping sustain housing demand.

The main constraint on the market remains the large number of homes available for sale. Elevated stock levels continue to give buyers plenty of choice and are limiting price growth in most markets. Some markets in the lower South Island are seeing price growth, which is encouraging for the wider market.

Looking forward, the Reserve Bank’s first increase of the Official Cash Rate during July is unlikely to materially impact the market given it was widely anticipated and largely already reflected in home loan rates.

Our view is the market is likely to remain broadly neutral through the second half of 2026, with continuation of the South Island outperforming the North Island.

In these competitive market conditions, it is critical that sales processes are set up for success through realistic price appraisals, effective marketing and dedicated salespeople.