Housing market confidence continues to improve.
Photo: RNZ
Housing market confidence continues to improve, though house price growth is expected to remain subdued.
“Indeed, we anticipate only muted house price growth in 2026. High inventory levels and some headwinds for housing demand are likely to temper house price growth,” the latest ASB Housing Confidence report said.
ASB chief economist Nick Tuffley said the results suggested confidence had moved past its weakest point, even if a strong price upswing was unlikely.
“House price expectations have clearly rebounded after a soft patch through 2025,” Tuffley said.
“However, high levels of housing supply and only moderate demand are likely to keep price increases relatively subdued through the first half of 2026.”
He said the outlook on interest rates was another reason why price growth would remain in check.
“With inflation ending 2025 above the Reserve Bank’s target band and mortgage rates already edging higher, people are now anticipating further increases this year,” Tuffley said.
“The switch over the quarter to fewer people expecting declining rates and more expecting higher rates was marked.”
However, the survey found rising optimism throughout the country, led by the South Island with a net 36 percent expecting house prices to rise over the coming year.
Auckland recorded the largest quarterly improvement, with net house price optimism rising to 33 percent.
“From a buyer’s perspective, prices are stable, supply is at a 10-year high and mortgage rates are still relatively low,” Tuffley said.
“However, rising expectations for both house prices and interest rates could prompt some buyers who have been sitting on the sidelines to act sooner rather than later, to avoid getting priced out.”
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