It’s that time of the year when many property market commentators churn out their expectations for the next 12 months and I’m no exception. Here’s a quick recap of 2025 and a look ahead to 2026.
It did prove to be the year of conflicting forces
This time last year we suggested that 2025 had the potential to be ‘the year of conflicting forces’, as lower mortgages supported sales volumes and property values, but other factors acted in the other direction – primarily a sluggish economy and labour market. In the event, this has largely turned into reality, with sales volumes rising but only recently returning to a more normal level, and property values staying fairly subdued – certainly in a key market such as Auckland.
Of course, while a rising unemployment rate and increased job insecurity have weighed on the housing market, buyers who feel more confident have nevertheless been enjoying continued access to finance and of course lower mortgage rates. Indeed, 2025 has seen a comeback by mortgaged multiple property owners, including the clichéd ‘Mum and Dad’ investors.
This group has recently returned to around 25% of market activity, in line with their long-term average. The full reinstatement of mortgage interest deductibility will have played a role here, but lower interest rates themselves are likely to have been the bigger factor – significantly reducing any cashflow top-ups from other income sources.
Which factors might shape the market in 2026?
In keeping with our regular attempts to sum up each year ahead under a key theme/banner, it wouldn’t be a surprise to see some factors in particular rise above others to be important focus areas in 2026 – namely the regulatory environment in an election year (e.g. debt to income ratio caps, possible capital gains tax debates) and what...
