ANZ slashes house price forecast for 2026
Wednesday, 28 January 2026
The country’s biggest bank has cut its forecast of how much house prices are likely to grow this year by half and expects limited housing market movement.
The market finished the year on a subdued note, with the national median price down 1.6% to $786,977 in December, according to the Real Estate Institute’s latest figures.
Since then, it’s been reported that annual inflation increased to 3.1% in the three months to the end of December, and talk of an earlier than expected official cash rate (OCR) rise has begun.
Now, ANZ has revised its forecast for house price growth in 2026 down to 2% from 5%.
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While the economic recovery under way would support prices, there were important headwinds weighing against growth, the bank’s economists said in their latest Property Focus report.
“First, the housing market is starting 2026 with little momentum, suggesting that the recent flat trends in the market will persist through the early months of 2026.
“Second, uncertainty from the upcoming general election – including the prospect of a capital gains tax – may keep some home buyers on the sidelines through the year.”
But most importantly, hotter growth and inflation than expected by the Reserve Bank meant the OCR and in turn interest rates looked set to head higher sooner rather than later, the economists said.
“This makes 2026 look set to be another year of little movement in overall house prices.
“Weighing it all up, we have reduced our house price inflation forecast to 2%. We have kept our forecast for 2027 unchanged at 4.5%, which would see it broadly match income growth.”
BNZ also lowered its forecast recently, with the bank’s chief economist, Mike Jones, saying the market looked set to remain flattish for longer.
There had not been anything in recent housing market statistics to suggest prices were about to break out of their three-year long stasis, he said.
“Unsold inventory remains around 10-year highs. Middling sales activity continues to track at a similar pace to the supply of new listings.
“It all points to a market still in a broad state of balance, a neutral signal for house prices.”
That had led the bank to “nudge” down its forecast for the 2026 calendar year to 2% from 4% previously, he said.
But ASB continued to expect slightly higher price growth this year.
On the release of the latest Real Estate Institute figures, ASB economist Yen Nguyen said they anticipated some improvement in the market as more tailwinds began to emerge.
“However, house price gains in 2026 are expected to be limited to about 4% to 5% annually, given below-trend net immigration and the ample housing stock.”