NZ Budget Wish List – 2026/27

LJ Hooker Head of Research | Mathew Tiller

The market is stabilising, but momentum remains patchy

New Zealand’s housing market has spent much of the past 12 to 18 months finding its feet.

Prices have largely stabilised, activity has improved from the lows and buyers have had more choice, but momentum remains below what we would typically see in a stronger housing cycle. REINZ data continues to point to a softer market environment, with national sales volumes down 7.9% year on year, the national median price easing 0.6% to $775,000, and the national House Price Index sitting 0.9% lower annually. Listing levels also remain elevated, providing buyers with greater choice and reducing the urgency seen during previous market cycles.

There are also signs households are taking a longer-term approach to housing decisions. Cotality’s March quarter Pain and Gain report found profit-making resales had a median hold period of 10 years, matching the longest ownership duration on record. At the same time, 87.8% of residential properties resold for more than their original purchase price, remaining well below the 2021 peak of 99%.

This is translating into more balanced conditions between buyers and sellers. Buyers remain active but selective, vendors are facing more competition and the market is operating at a more measured pace than in the 2021 cycle.

Looking ahead, winter is likely to remain a more challenging trading environment. Stock levels remain elevated, buyers are increasingly selective and uncertainty around the interest rate outlook continues to influence decision-making. If listing volumes continue to grow faster than sales activity, buyers are likely to retain the upper hand and selling conditions may remain slower.

This backdrop is important because it shapes what the upcoming Budget should focus on. The market does not need another rapid rise in house prices. It needs a healthy level of buyer demand, gradual price growth and housing that can be delivered where people want to live. The focus should be on supporting confidence, improving housing delivery and creating the conditions for gradual and sustainable market growth.

Budget priorities for the property sector

New Zealand’s housing market increasingly needs balance. The challenge is no longer simply increasing supply or stimulating demand. The focus should be on creating the conditions that improve affordability, support market activity and ensure housing can be delivered where people want to live.

1. Increase infrastructure funding tied to housing delivery

Enabling infrastructure remains one of the biggest constraints.

Investment in transport, water, utilities and enabling infrastructure remains critical if housing supply is to expand in locations where demand exists.

While dwelling consents have started to recover, activity remains below previous highs. Stats NZ data shows dwelling consents have improved through early 2026 but remain materially below the record levels reached during 2022. The challenge is increasingly not whether homes are approved, but whether projects can actually proceed and be delivered where population growth and demand are strongest.

The focus should shift toward infrastructure investment that directly unlocks housing delivery rather than simply increasing land supply or approvals.

2. Introduce measures that support confidence and market activity

The market does not need another boom cycle. It needs a healthy level of buyer demand and transaction activity.

The objective should be stable turnover that supports gradual price growth and normal market mobility.

Over the past 12 to 18 months, housing values have broadly stabilised while activity has remained below long-term averages. National housing values remain well below previous peak levels, while sales activity, although improving from cyclical lows, remains softer than historical norms. Conditions point to a market rebuilding confidence rather than entering another growth cycle.

Policies that improve certainty and support confidence can help restore normal transaction activity without creating affordability pressures.

3. Expand targeted support pathways for first home buyers

Support for first home buyers should remain targeted.

Shared equity models and targeted deposit support can improve market access without creating another demand driven price cycle.

First home buyers have remained an active segment of the market despite affordability pressures and higher borrowing costs. However, access challenges continue to persist, particularly around deposits and servicing costs. Targeted support measures can improve participation without introducing broad based demand stimulus that risks pushing prices materially higher.

The objective should be improving access, not reigniting another housing boom.

4. Reduce construction and housing delivery costs

Housing affordability remains closely linked to the cost of delivery.

While consent activity has improved over recent quarters, project feasibility continues to face pressure from elevated construction and compliance costs.

Stats NZ dwelling consent data showed consents increased 14.6% year on year in Q1 2026. Analysis of Stats NZ consent data reported by Interest.co.nz suggests estimated construction costs remain elevated at around $3,229 per square metre, with average estimated build costs still exceeding $450,000 per dwelling. While the pipeline is showing signs of improvement, elevated costs continue to challenge whether approved projects progress into completed homes.

Reducing construction costs and improving delivery efficiency remains critical if housing supply is to respond more effectively over the longer term.

The bottom line

The property market does not need another boom cycle. What it needs is a healthy level of demand, improved confidence and housing that can be delivered efficiently and affordably.

This Budget presents an opportunity to focus on the practical levers that matter most, infrastructure, confidence, targeted support and housing delivery. If those conditions improve, the broader market is well placed to do the rest.