NZ house sales in 2026 down 5% on last year as Iran war, economy weigh on market

Wednesday, 20 May 2026

House sales fell for the fourth month in a row as geopolitical and economic uncertainty weighed on the market, a property researcher says.

While the economic impact of the Middle East conflict on prices dominates discussion, Cotality’s latest Housing Chart Pack highlights that housing market activity has been sluggish from the start of the year.

The data shows there were 7097 sales nationwide in April, and that volume was 9% down on the 7799 sales in the same month last year.

That sales figure was higher than the 10-year average for April, which was 6612 sales, but it continued a decline in the sales trajectory that began in January with a 10.7% year-on-year fall.

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Cotality chief property economist Kelvin Davidson said sales over the year to date were about 5% below the same time last year, which equated to about 1500 fewer deals nationwide.

The declines themselves were not especially large, and sales were not “bad”, but the persistence of weaker activity indicated a housing market that was struggling to regain momentum, he said.

“Confidence remains fairly fragile and buyers are taking a cautious approach, with uncertainty around the economic outlook, the inflationary impacts of the Iran conflict, and the potential for higher mortgage rates all weighing on the market.”

Further muted results seemed likely in the next few months too, given the Iran conflict was lingering, and economic growth projections were now weaker than they had been at the start of the year, he said.

“We were forecasting the annual sales total would increase to around 100,000 sales this year from about 90,000 last year, so about 10% growth in activity.

“But with sales growth in four months out of 12 negative so far, it would be hard to get that level of growth, especially with interest rates likely to go up. It’s looking like sales will stay pretty flat, and come in at about 90,000 again.”

Davidson said that level of activity was still significantly up on the market trough in 2022 when the annual sales tally was about 67,000, and it was not far off the long-run average of 91,000 to 92,000.

“So it’s not terrible, but it does illustrate how much things have changed around buyer confidence and economic uncertainty.

“It also means listings have stayed elevated and buyers continue to have the pricing power.”

New listings activity had been solid over recent months and was in line with normal seasonal patterns with the autumn and winter slowdown underway, according to the chart pack.

It also showed that on a national basis house prices remained steady, with Cotality’s Home Value Index recording a 0.1% rise in April, and a 0.6% increase across the three months to April.

But the national median of $809,101 was down 0.8% from the same time last year, and was still 16.8% lower than at the market peak in late 2021.

Davidson said performance across the main centres continued to vary, with Christchurch and Dunedin showing relative resilience while Auckland and Wellington remained softer.

There were still parts of the country where prices were edging higher, but overall the market’s performance was fairly flat, he said.

“Auckland and Wellington remain subdued with prices well below their record peaks, while some of the more affordable areas are holding up better. At a national level, prices are essentially moving sideways.”

Looking ahead, there was a good chance the knock-on effects from the Iran conflict could see sales and prices stay subdued for the foreseeable future, with mortgage rates set to play a key role, he said.

“Before the conflict, they were expected to go up this year anyway, and now banks have already lifted them - even before the Reserve Bank has done anything to the OCR.

“We expect to see them trend up, and higher mortgage rates are a big restraint on sales activity. Talking to mortgage brokers and valuers, they’re seeing a reduction in mortgage applications, and that will flow through to activity.”

Cotality’s sales data told a similar story to the Real Estate Institute’s April data, which showed national sales fell 7.9% year-on-year in April.

But the institute said once seasonally adjusted sales eased 2.1% compared with March, and that the number of sales was close to the long-term April average.

That suggested buyers were still active but taking a more measured approach, it said.

Economist Tony Alexander surveys real estate agents every month. Real estate agents responding to his April survey said buyers were worried about interest rates rising, employment, and that prices might fall after making a purchase.