“Indicators of the balance between demand and supply suggest prices will continue to be flat through the early part of 2026… It is flat as a pancake, suggesting prices will be too,” they say, pointing to median days to sell stuck at 45 – above the long‑run 40‑day average – and auction clearance rates signalling little movement either way.
On the supply side, they highlight that inventories have hovered around a 10‑year high for over a year, supported by resilient house‑building and consents per capita that have only eased back to long‑run averages, plus low but gradually recovering net migration held back by a strong Australian job market.
Against that backdrop, ANZ has materially softened its outlook.
“Weighing it all up, we have reduced our house price inflation forecast for 2026 to 2% (from 5% previously),” the economists said. “We have kept our house price inflation forecast for 2027 unchanged at 4.5%, which would see it broadly match income growth.”
Regional split and election uncertainty cap momentum
The report highlights a clear North/South divide. Wellington prices are down about 4% over six months, with Auckland drifting lower too, while Canterbury, Otago, and Southland continue to rise on the back of “stronger regional economies.”