New Zealand residential investment report Q4 2026

Housing market remains in neutral

New Zealand’s housing market continues in a neutral state, with prices moving largely sideways for most of 2026. Recent sales activity has been slightly softer than a year ago, while elevated stock levels continued to constrain price growth. A seasonal lift in activity is expected late 2026, but overall conditions are likely to remain broadly neutral.

Regional markets continue to diverge

The lower South Island has been outperforming other regions. Relative affordability, strong rural and tourism-related economies and internal migration gains are supporting housing demand and rental performance in these regions.

Home loan rates rising

Home loan rates have seen upward pressure as monetary policy takes steps to control inflation. Interest rates remain an important influence on the market, but recent rises have been widely expected and have not materially changed overall market conditions.

Demand remains resilient

The rental market has seen reasonably neutral conditions. Demand remains strong for well-presented properties in desirable locations and school zones, with appropriately priced homes continuing to attract tenants relatively quickly.

Tenants staying longer

Tenancies are becoming longer as the cost and disruption of moving encourage renters to remain in place. Greater flexibility around pets and minor alterations is also supporting tenant retention. Stable tenancies provide owners with more reliable cash flow and can influence their decision to retain rather than sell an investment property.

Outlook cautiously improving

Investor sentiment remains neutral, although expectations for rental and capital growth are gradually improving. Rents are expected to rise modestly in response to improving migration and tightening availability of rental homes.