Buyer caution keeps housing market subdued as sales fall again
Thursday, 19 March 2026
Buyer caution is keeping a lid on housing market activity, with sales taking another tumble and prices staying flat last month, Cotality says.
The property research company’s latest Housing Chart Pack shows there were 7381 sales nationwide in February, and that volume was 6.8% down on the 7921 sales in the same month last year.
That sales figure was also lower than the long-term average for February, which was 7898 sales, and it followed a 7.8% year-on-year fall in January.
Cotality chief property economist Kelvin Davidson said it marked the first time in almost three years that sales had declined in two consecutive months.
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Buyer caution was a defining feature of the country’s broader housing market through the first two months of the year, he said.
“Sales volumes remain fairly sluggish and it’s a timely reminder that confidence takes time and is still rebuilding.”
December activity was unusually strong, so some of the recent softness might reflect timing rather than a new downward trend, he said.
“But even allowing for that, the housing market is still in a phase where buyers are taking their time.”
Cotality’s sales February figures differed from the Real Estate Institute's latest figures, which put last month’s sales up 0.3% annually to 6523 nationwide.
But Cotality’s figures cover agent sales and private sales, while the institute only reports on agent sales.
On an annual basis, sales continued to inch up from the low of about 65,000 a year they fell to in 2022 and 2023, following the Covid market boom.
Over the year to the end of February there were 89,869 sales, which was close to the long-term average zone of 90,000 to 95,000 a year.
Meanwhile, the total number of homes for sale remained relatively high in February, although it was down 17% from the same time last year and back at 2023 to 2024 levels, Davidson said.
“The recent lift in sales is starting to erode stock levels, and all parts of the country have started to see stock levels fall, with the sharpest declines in Southland, Otago, and Bay of Plenty.”
House prices nationwide were flat, up just 0.2% to a median of $806,697 in February, according to Cotality’s data.
That was 1.2% lower than at the same time last year, and about 17.3% below the early 2022 peak.
First home buyers remained the key market force, accounting for about 27% of purchases nationwide and about 30% in Auckland across January and February combined, the figures showed.
Davidson said several economic and financial factors would influence how the housing market performed over the rest of the year.
“Around 59% of existing mortgages by value are due to be repriced over the next 12 months, and that could provide some relief for households if borrowers move onto lower interest rates.”
But global uncertainty and inflation pressures continued to pose unknown risks, he said.
“The US-Israel-Iran conflict and higher fuel prices are potential inflation risks in the near term, but if those pressures prove temporary the Reserve Bank should still be able to hold the OCR steady.
“That would allow the market to gradually rebuild momentum, although any recovery in prices and sales volumes is likely to remain modest rather than rapid.”
Earlier this week Quotable Value (QV) released its latest house price index, and it also showed prices remained flat over summer.
It had the national average house price up 0.2% to $909,139 over the three months to the end of February. That was 0.4% lower than the same time last year but 21.5% higher than in March 2020.
QV spokesperson Simon Petersen said prices had been largely static over the quarter, although Dunedin was a notable exception with a 2.6% price increase.
But the market continued to tick along with activity relatively robust in many parts of the country, he said.
“Listing levels and buyer demand are relatively well balanced, helping to keep prices broadly stable for the time being.
“At the same time, global uncertainty and geopolitical tensions mean the outlook is somewhat murky right now, particularly when it comes to interest rates and inflation.”