‘No more crazy shocks please’: the business of property in 2026
Friday, 26 December 2025
There won’t be a “spectacular” acceleration in the property market next year, but there is an expectation that a slow, steady improvement across the different facets of the business will continue.
On the face of it, the property year has finished in subdued fashion, with a host of data showing a flat residential market, and a quiet commercial one.
The Real Estate Institute’s figures had house prices creeping up slightly in November, but sales down 5.7% annually, while Cotality’s Home Value Index had the national median down 0.7% on the same time last year.
Various market commentators have told The Post a property boom was not coming, although a measured recovery was in store. But there’s no doubt sentiment has improved.
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ASB’s latest housing confidence report showed 28% of respondents felt now was a good time to buy, the highest level since mid-2010,while ANZ’s latest business confidence reports revealed significant upturns for residential and commercial construction.
So here’s a look at how business is shaping up across some of the different silos in the world of property.
Real estate agents
For much of the year there has been a rising trend in house sales, although that has flattened in recent months.
However, Cotality’s chief property economist Kelvin Davidson says that given the falls in mortgage rates over the past 12 to 18 months and the prospect of a stronger economy in 2026, sales look likely to rise again next year.
A net 23% and 24% of respondents to economist Tony Alexander’s latest survey of real estate agents reported more people were showing up at auctions and open homes respectively, but those figures were down on the previous month.
Alexander’s survey also found that for the third month in a row a net 53% of agents around the country said they were receiving more enquiries for property appraisals.
According to Real Estate Institute chief executive Lizzy Ryley, local salespeople around the country have been reporting pockets of strong enquiry and a growing sense of optimism in the market.
That seems to be reflected in the latest licensing figures from the Real Estate Authority which show that over the year to December 22 there were a total of 16,074 active, licensed real estate agents.
It’s an increase of 3.3% on 15,557 over the year to December 31 2024, and is also above pre-pandemic levels where the number was just over 15,000.
Real Estate Authority chief executive Belinda Moffat says the number of licensees has increased, but real estate professionals continue to navigate a challenging market and must manage a wide range of expectations from vendor and buyer consumers.
While listings have increased in many areas, days to sell remain high, and price remains uncertain, she says.
“Licensees must constantly evaluate the shifting market conditions and provide consumers with good advice on best methods of sale and how to navigate the transaction process. This will be important as they head into 2026.”
Mortgage lending
The numbers around mortgage lending activity have been “out of the gate” over the past few weeks, the head of the country’s largest mortgage broking group says.
Bruce Patten, who is chief executive of New Zealand Financial Services Group and Loan Market, says it’s been driven by refinancing, and is a response to competitive bank clawback offers.
“We’ve been extremely busy, and numbers are up, but the refinancing activity - which has been a bit of a merry go-round in terms of lending activity - will settle down now.
“It does set us up for the year to come. More generally, activity is picking up and will continue to do so. We have a conservative, but cautiously optimistic outlook for the next year.”
Most in the industry would feel similar, but there are some bumps ahead that the market may still encounter, he says.
“The big one being increasing rates, as we’ve seen recently, and which should not have happened. So a lot depends on whether banks keep upping their rates and what intervention the Reserve Bank makes.
“What unfolds there could impact on the market recovery, but first home buyers are active and new home consents have started to increase.”
There is the election coming up, and it looks like it will be a close-run thing, Patten says.
“Both sides tend to throw the kitchen sink at it and make promises they can’t keep, so we’ll have to see what they might, or might not promise in this space. What they come up with could impact the market.
“That makes buyers, especially investors, nervous, and once people are on a trajectory of ‘let’s just wait and see’ it can be problematic for the housing market.”
Property investment
Cotality’s latest buyer classification figures show investors have been returning to the market, and had a 25.0% share of purchases over October and November, the highest since 2021.
Davidson says this has been driven by smaller and new investors, who are looking at lower price bands and existing properties, with lower mortgage rates and reduced cashflow top - ups are a key factor.
Flat house price growth, a tighter tenant market and easing rents has made for a new reality for landlords, but Property Investor Federation spokesperson Matt Ball says they are adjusting to it.
“Capital gains are rising at the rate of inflation not above it, and investors are acting accordingly. So it’s not a market where every Tom, Dick and Harry is out there trying to buy a house quickly so they don’t miss out on capital gains.
“Instead investments are being made based on value add potential and cashflow, and that’s positive. The investor space is more business-like, with a focus on providing good quality residential accommodation and running it well to make a profit.”
The market has been trucking along at about the same level for some time, and Ball suspects it will continue to do that for some time, rather than doing anything “spectacular”.
There is cautious optimism though, and a feeling that 2026 should be better than recent years, he says.
“Interest rates are lower, although some recent raises in long-term fixed rates suggest there will be no further reductions, barring unusual circumstances.
“The economy seems to be picking up slowly, there’s a bit more employment, a bit more confidence. But so many crazy things have happened over the last five years, the feeling now is ‘no more shocks please’.”
Like Patten, he thinks the election may dampen the market mid-year as uncertainty over who might be the next government may lead to a pullback from big purchases, such as property.
“Many investors will be keeping a close eye on the polls, and most are eager to know what Labour is going to decide around tax and especially interest deductibility, and if it will be removed again.”
Construction sector
The construction sector has gone through a prolonged downturn, and 2025 was another hard year for it. But Building Industry Federation chief executive Julien Leys says 2026 is going to be better.
“It’s not just wishful thinking - we are seeing positive signs from industry. One is the amount of concrete and steel going out, including on the retail side.
“Another is one of the major hire firms reporting a big pickup in activity because if lots of big machinery is being hired out it means activity is on the way.”
He also points to the latest national construction pipeline report as another example. It forecasts growth in construction activity from 2026, up to a high of $65.1 billion by the end of 2030, with growth across infrastructure activity, non-residential construction and residential construction.
According to the report, multi-unit consents will drive growth in residential activity, with multi-unit homes expected to make up over half of new home consents over the years to 2030.
Leys says the new fast-track legislation will increase the number of housing projects going through, and a few nationally significant developments of 1200 plus homes have already been approved.
“That larger scale of activity flows through to the whole sector in terms of materials and jobs, so we are encouraged by that. And with some of the road blocks at council level reduced that will help the flow too.
“We are starting to see an impact from building industry reforms, with consent times getting shorter and greater acceptance of more overseas materials. That’s speeding things up, and it’s a trend that will increase in the new year.”
One worry is that a potential lack of skilled labour when construction really picks up again could cause bottlenecks, he says.
“Next year the sector should see some growth and consolidation, but it will still be gathering steam, and it won’t see the full benefits until the year after.”