A generational split emerges within National on house prices

Thursday, 4 December 2025

An apparent split in the National Party over falling house prices is symptomatic of a generational split in New Zealand around home ownership, says one political analyst.

In recent months, Housing Minister Chris Bishop and Prime Minister Christopher Luxon have been at odds over whether falling house prices are a good thing.

Luxon has said he wants to see “modest” and “consistent” house price increases, while Bishop has taken the opposite line, saying house prices in New Zealand were unaffordable and needed to fall.

“Average house prices in New Zealand are too expensive,” Bishop said in June, adding that he wanted to see “housing to be more affordable”.

Bishop will then be happy with the recent housing data released by Cotality, which shows the national median house price now sits at $806,551, 17.4% below the early 2022 peak.

Auckland is 22.9% below its peak, while Wellington is down 25.1%, and Tauranga 15.2%.

Christchurch, however, bucks this trend slightly, albeit still 3.8% below its peak.

Rents and renters have also been targets of the Housing Minister, and just this week, Bishop came out in support of renters, saying they should use their power to ask landlords for lower rents.

“Having rents falling is actually a good thing,” Bishop said on Wednesday. This came after the minister had been celebrating indicators of rents lowering or moderating on social media in recent months.

Data from the Ministry of Housing and Urban Development does suggest either flat or falling rents in major centres for new tenancies.

As reported by The Post, nationwide new rents were down 0.4% year on year in September, with drops of 6.4% in Wellington and 0.6% in Auckland.

A transition within National

Economist Shamubeel Eaqub says the differences in opinion within National on housing prices represent a transition in New Zealand politics between young and old.

“I think this is the transition to the way that any political party has to navigate the current environment,” he told Stuff.

“It doesn't matter if you're left or right. Being young in New Zealand means that home ownership is hard and if you keep on running a party for boomers, you will die.”

Eaqub said a new generation, represented by Bishop, is emerging within the National Party that realises the party's future survivability depends on doing the right thing for future generations.

“What I see with Bishop is a Housing Minister that's continuing something that was started under Phil Twyford,” Eaqub said.

“We've had three housing ministers that have largely pursued the same kind of housing policies, and within the younger part of the national caucus and National Party, that's exactly what they want to see.”

The National hierarchy has traditionally been all about high house prices going back years, making Bishop’s views a break with the norm.

This is summed up by a speech former National Prime Minister John Key gave in 2024 to a group of business leaders, where he said the “core of what’s wrong” with the economy was falling house prices.

A shifting voter base

Despite this, Eaqub says the voting base in New Zealand is shifting and National now has to choose where the political calculus lies.

“If you look at the Ipsos survey on housing attitudes, you'll see, even amongst older people, there is a growing awareness that something's not right in the housing market in New Zealand.

“That narrative has really matured from one going ‘all for me and not for anybody else’ to going, actually, ‘there is a societal problem, and we should do something’.”

What does this mean for the 2026 general election?

The Reserve Bank is not predicting much of an increase in housing prices, forecasting a 0.3% fall this calendar year.

Economically speaking, though, analysts tend to be split on the view of whether rising house prices are actually good for the economy.

Chief Economist at Westpac, Kelly Eckhold, told RNZ in August that rising house prices were usually an indication of nominal economic growth.

'When house prices are rising, people who have houses generally feel a bit richer, so they spend a bit more than they otherwise would, that's obviously positive for the economy in a cyclical sense.”

Others say otherwise, including Infometrics chief forecaster Gareth Kiernan, who told RNZ that getting the economy growing by pushing up house prices was “short-sighted”.

He said this would lead to less home ownership and push more people overseas due to being priced out of the market.

As for National, heading into 2026, Eaqub believes the split on the issue is set to remain within the party between the traditional old school National and the new school.

“I think you will find the leadership will remain very focused on trying to appease the base, and that's what we've seen with Luxon. I mean, essentially, everything he talks about is very traditional, old school National messaging.”

“Bishop is a much more astute politician than people who speak to their base and to themselves rather than to future voters.”

Eaqub says what is emerging now is a “little bit of a splinter”, however, he does not expect “substantial” policy change in support of young people.