2026 outlook improving amid easing inflation, lower costs, and rate cuts
Davidson said market fundamentals are gradually improving, with affordability lifting, fewer listings, and interest rates trending down as existing borrowers reprice onto lower market rates.
“With affordability improving slightly, listings lower than last year, more existing borrowers repricing loans down to market interest rates, and the unemployment rate set to drop next year, 2026 may look stronger for both property sales volumes and values,” he said.
Key data from Cotality’s October 2025 Housing Chart Pack
NZ’s housing stock value: $1.65 trillion.
Cotality Home Value Index: +0.1% in September, −0.7% over the quarter.
Sales volumes: 88,731 over the 12 months to September.
Active listings: 27,565 in early October – still elevated but down year-on-year.
Gross rental yields: 3.8% – the highest since mid-2016.
Inflation: Back within the 1-3% target band; the RBNZ continues its easing cycle.
Buyer classification: First-home buyers record 28% of national purchases; investors regain 24.6% – the highest since early 2021.
Regional highlight: In wider Wellington, first-home buyers made up 36% of purchases in the September quarter – the highest share among major centres.
Market stabilisation continues despite limited stimulus
For mortgage advisers, the message from Cotality’s latest report is clear: the market remains balanced and resilient. While RBNZ’s LVR easing and slower construction cost growth may provide a mild lift for confidence and affordability, tight DTI limits, subdued investor yields, and elevated borrowing costs will keep overall momentum contained. Broader growth drivers – interest-rate easing, labour market recovery, and construction stability – are expected to shape the next meaningful upswing in 2026.