Iran War: House price rise could be undermined by Middle East conflict
Monday, 16 March 2026
House prices took a solid turn up in February, but the Middle East conflict could weigh on buyer demand and price growth in the coming months, experts say.
The Real Estate Institute’s latest figures are out, and they show the national median price rose 5.3% between January and February to $795,000.
On an annual basis the national median was up 3.2%, and median prices in 13 of the 16 regions monitored increased, with Otago showing the strongest growth at 13.2% (to $755,000).
Real Estate Institute chief executive Lizzy Ryley said the three-month trend pointed to a modest but steady lift in prices nationally, reinforcing the gradual recovery that started to become evident earlier in the year.
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“The southern regions, particularly Otago and Southland, are maintaining strong momentum. In contrast, Northland continues to feel some downward pressure following recent severe weather and flooding.”
In the Auckland region, the country’s biggest market, the median price rose 6.7% in February and 1.4% annually to $1.01 million.
The Wellington region’s median was up 10.4% in February and 1.4% annually to $805,800, while Canterbury’s was up 2.9% in February and 2.1% annually to $720,000.
The institute’s house price index, which smooths out variations from sales figures, was up 1.9% on January and was unchanged on the same time last year. It is now 14.6% below the market peak.
There was a big jump in sales activity nationwide in February, with 6523 sales, the figures showed. That was a 0.3% annual increase, and once seasonally adjusted sales were up 6.6% on the previous month.
In Auckland and Canterbury sales were up, by a seasonally adjusted increase of 10.6% and 7.1% on the previous month, and by 4.1% and 1.1% on the same time last year.
But in Wellington sales were down 4.3% in February once seasonally adjusted, and they were also down 5.7% annually.
The national median days to sell figure crept up to 56 days in February.
Ryley said sales naturally fluctuated over the summer months, and three key forces shaped market activity during February - the weather, interest rates, and the approaching election.
But the market had been stable for some time, and growth was expected to continue through to autumn, with Canterbury and Otago likely to lead the way and Auckland gradually improving, she said.
“Wellington and the storm-affected northern regions may take longer to return to normal levels. Rising costs, ongoing weather disruptions, and election uncertainty mean buyers are likely to remain cautious.
“The situation in the Middle East is something we are monitoring closely, as it may influence household confidence and the cost-of-living environment in which buyers and sellers make decisions.”
For ANZ senior economist Matthew Galt, the monthly increase in prices was markedly stronger than the recent trend, and he was doubtful it represented a shift in the underlying direction in the market.
Other indicators of housing demand were not showing the same strength, including sales volumes, which remained a touch below their long run average, and days to sell, which lengthened further in February, he said.
“Today’s data also refers to a period before the conflict in the Middle East broke out. Nervousness about how the conflict could impact the economy here will add to the sense of caution among buyers in the coming months.”
Infometrics chief forecaster Gareth Kiernan said the institute’s data suggested more stability in the market, after sales declines in November to January pointed towards a softening market.
“This assessment of a more stable market is reinforced by less negative trends for house prices and the stock of properties.”
But the Middle East conflict had led to significant increases in petrol prices, and if higher fuel prices continued for any sustained period, they would undermine New Zealand’s economic recovery and hit consumer confidence, he said.
“In tandem with upward pressure on mortgage rates, international events could weaken housing market demand in coming weeks and lead to renewed downward pressure on house sales and prices.”