Cooler market moves bargaining power back to buyers
Six years on from New Zealand’s first COVID‑19 lockdown, the housing market has shifted from boom and bust to a more even footing – a change with clear implications for mortgage advisers, first-home buyers, and property investors.
The latest QV House Price Index shows national home values are now 21.6% higher than in March 2020, but growth has almost stalled, with values slipping 0.4% over the past year and 0.1% in the March 2026 quarter.
That shift lines up with Reserve Bank expectations, with policymakers now forecasting house prices to be broadly flat through 2026 after falling about 20% from their pandemic peak – leaving borrowers with less of a “wealth effect” buffer if other costs rise.
“The past six years have really been a story of two extremes – incredibly rapid, unsustainable growth, followed by a sharp correction, and then a gradual return to normal,” QV spokesperson Simon Petersen said.
Regional shifts matter for first-home buyers and investors
The national picture masks diverging regional trends that matter for loan structuring and risk assessments.
Auckland’s average home value is still 9.6% above its March 2020 level, despite modest declines over the past year and quarter. Christchurch stands out as the strongest performer, with values now about 55% higher than pre‑lockdown and still recording modest annual and quarterly growth.
Wellington is the notable laggard, with average values now slightly below March 2020 levels after further falls over the past 12 months.
Petersen notes that higher‑priced markets “felt the boom and the correction more sharply,” while regional and lifestyle areas also surged as buyers sought space during lockdowns.
Layered on top of these value trends is a fresh squeeze from construction costs. QV’s latest CostBuilder update shows elemental and trade costs up an average 0.4% over the month, with diesel‑intensive work such as excavation rising much more sharply – a combination that can strain project budgets and borrowing capacity for clients using construction loans.
Caution, negotiation, and fundamentals back in focus
For the housing market, the key shift is behavioural.
“It’s now a much more stable and balanced housing market that’s behaving more like it used to, back before COVID‑19,” Petersen said.
Buyers are taking longer to commit, vendors are more realistic on price, and movements are modest – all of which supports deeper conversations about mortgage rates, repayment buffers, and long‑term strategy.
“The housing market of 2026 seems to be defined more by caution rather than urgency,” Petersen said.
That caution is now shaping how buyers and sellers approach every deal.
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