2025 has been a year of stabilisation for the property market.

After the soaring prices post-Covid, and the following slump, the market has been finding an equilibrium over the past 12 months.

Here are a few things to note if you’re wondering about any property decisions you might make in 2026.

Market performance

Prices have largely been flat through most of 2025. The Real Estate Institute (REINZ) has reported its house price index – which smooths out movement in median sale price data – has barely moved in many months.

There are more listings coming on to the market, but sales activity has picked up as well. There are more than 30,000 houses currently listed for sale across the country.

Real Estate analytics company, Cotality (formerly CoreLogic), said its data appeared to show that a small house price slide they recorded during the winter months had halted in September.

Much of the continuing housing market weakness has been focused on Auckland and Wellington. Smaller regional centers have been recording more growth (or smaller falls), and the South Island has generally been stronger.

What changed in 2025

Some changes have come into effect this year that are expected to have an impact on the property market.

From December 1, loan-to-value restrictions will be eased allowing banks to offer a greater percentage of their new lending to low-deposit borrowers.

The percentage of new loans that can be lent to owner-occupiers with less than 20 percent deposit will increase to 25 percent (up from 20 percent at present).

For investors, banks will be allowed to lend 10 percent of new loans to investors with less than a 30 percent deposit or equity(up from 5 percent at present).

Debt-to-income ratios are also now in place, limiting how much lending banks can offer to households with higher levels of debt compared to their income.

A notable change for the property market has been the drop in the official cash rate throughout this year. Having started the year at 4.25 percent in January, the OCR is currently sitting at 2.25 percent.

A better picture for affordability

For many home buyers, the affordability story has improved a lot.

Cotality said affordability was at the best level since 2019.

Thanks to the drop in interest rates, for existing homeowners, refixing has also given some people a budget boost – potentially saving hundreds of dollars a week in repayments or giving them the opportunity to pay off their loans more quickly.

However, with the labour market weak and price pressure still being felt, times have been tough for some New Zealanders, particularly those who have found themselves out of work. That has been one of the factors cited in why buyers may have been holding back. For those in the market, the relatively high number of listings and reduced competition has created a good environment to buy.

What’s coming next?

Forecasts are for house prices to rise and activity to pick up as the economy improves moving into next year.

Some major bank economists expect a price increase of about 5 percent during 2026.

First-home buyers have been operating at record levels and that is forecast to continue for the time being, but investors are expected to feel the most benefit from changes in loan-to-value rules because banks have largely avoided lending to lower-deposit investors.

We are here to help

Whether you’re thinking about buying, selling, or just paying off your mortgage more effectively, your SHARE adviser is here to help. We’re home loan experts and can answer questions you may have about any stage of the process.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.