-- House prices in New Zealand rose 0.8% in the three months to March, but are forecast to fall by 2% over 2026, ANZ said in a report on Wednesday.
Prices in the South Island continued to trend higher, with local economies bolstered by growth in agriculture and tourism. The Auckland and Wellington markets also saw prices rise slightly from their low points a few months ago. ANZ said this was likely due to an economic recovery underway and the interest rates being set at a low level.
The New Zealand housing market was showing signs of strengthening before the conflict in the Middle East. However, the resultant fuel price shock has weakened the outlook for economic growth and is pushing up inflation.
A big negative for the housing market is likely to come from upward pressure on interest rates. ANZ forecast that the Reserve Bank of New Zealand will raise the official cash rate three times this year towards 3%, starting in July.
Another headwind for house prices is the upcoming general election, including the Labour Party's commitment to introduce a capital gains tax on residential investment property and commercial property.
Median mortgage rates of one year and longer are all up, with the biggest change seen in two-year and five-year rates, per the report.