Blog Article

If you’ve been sitting on the sidelines wondering whether now is the right time to buy, refinance, or invest, this update is for you. Here’s a clear-eyed look at where the market has been over the last quarter, where places like Wellington stands right now, and what the rest of 2026 is likely to bring for the country.

The National Picture: A Market in Early Recovery

The last couple of years have been tough going for property owners and buyers alike. After peaking in late 2021, national property values fell significantly and as recently as the end of 2025, values were still down around 17.6% from that peak, with the national median sitting at approximately $808,430.

But the story heading into 2026 has changed. The market has found a floor, and the conversation has shifted from “how far will prices fall?” to “when and how fast will they recover?”

The recovery is not uniform across the country. Some regions like Christchurch, Tauranga, Dunedin, Southland, and parts of Otago have already seen modest but meaningful gains. Others, including Auckland and Wellington, remain more subdued. New Plymouth and Queenstown have also shown positive movement in recent months.

Nationally, property sales volumes are recovering steadily. In the 12 months to April 2026, New Zealanders bought around 79,700 properties still well below the 2021 peak, but a significant improvement from the trough of 58,700 in mid-2023. Stock levels now sit close to the long-term median of around 22 to 23 weeks, suggesting the market is broadly balanced between buyers and sellers rather than tilted heavily in either direction.

Wellington: Still Finding Its Feet 

Wellington tells a more complex story than the national average.

The Wellington City median house price currently sits at approximately $765,000 (April 2026), with the Wellington City district average around $910,000 according to QV data from May 2026. Over the past 12 months, Wellington City prices are down around 2.5% year-on-year reflecting the ongoing hangover from the post-COVID peak when Wellington values soared before falling more sharply than most other main centres.

From its October 2021 peak, Wellington City is still down roughly 28% one of the steeper corrections of any major New Zealand city.

That said, there are early signs of stabilisation. Quarter-on-quarter, Wellington City prices were up 0.26% in the three months to May 2026 not dramatic, but a meaningful shift after an extended period of declines. Properties are taking around 46 days to sell on average, and while that’s slower than in hotter market conditions, it reflects a more considered buyer environment rather than a distressed one.

First home buyers remain very active across the Wellington region, taking advantage of softer prices, reduced competition, and improved lending conditions. If you are a first home buyer, the current environment, while not without uncertainty, offers some of the best entry conditions seen in several years. Wellington is now the capital in New Zealand for first home buyers having the largest proportion of its buyers coming from this market.

Within the Wellington Region, there is notable variation by district. Wellington City is the most expensive at a median of $842,500, while Carterton District is the most affordable at $500,000. Wallaceville has been among the fastest-growing suburbs in the region over the past two years, while Wellington Central has seen the most significant softening.

Interest Rates: Where We Are and Where We’re Heading

The OCR story is critical context for anyone making mortgage decisions right now.

The Reserve Bank held the OCR at 2.25% at its May 2026 review, the third consecutive hold following a rapid easing cycle that cut 325 basis points between August 2024 and November 2025. That easing cycle is what has brought borrowing costs down significantly from the highs of 2023–2024 and is a key reason buyer confidence has been gradually returning.

Right now, one-year fixed mortgage rates are sitting around 4.65%–4.75%, and two-year rates have edged up around 20 basis points since February.

Here’s the important part: the tone from the Reserve Bank has shifted. Policymakers flagged at the May meeting that higher global fuel prices driven by ongoing international conflict are expected to push headline inflation toward 4.3% in Q3 2026, before returning to the 2% target by mid-2027. As a result, the RBNZ has signalled that the OCR is now more likely to rise than fall from here.

Most major bank economists at ANZ, Westpac, and BNZ are now forecasting at least one or more OCR increases before the end of 2026, potentially lifting the OCR to 2.5%–3.25%. That could push one-year mortgage rates to around 5% or beyond into 2027.

What this means for borrowers:  If you are currently on a floating rate or coming up for refixing in the next few months, it’s worth having a conversation about your options sooner rather than later. The window of very low fixed rates may be narrowing.

The Forecast: Measured Growth, But Pace Matters

The consensus among economists, banks, and property analysts is that 2026 will see modest to flat national house price growth of between 0% and 2%, rather than the dramatic movements up or down that have characterised recent years.

ANZ had previously forecast 5% growth for 2026, though they have since revised that to around 2%, citing the changing interest rate outlook. Westpac and BNZ sit broadly in the 4–5% range for the full year. The Reserve Bank itself projects a “measured recovery” rather than a sharp rebound.

For Wellington specifically, the outlook is cautiously optimistic but more restrained than other centres. Analysts have noted that a cautious buyer attitude continues to pervade the Wellington market, and that prices may largely consolidate through 2026 before seeing more meaningful growth. Government employment changes, which significantly impacted Wellington’s local economy, appear to have largely worked their way through the market.

The broader forces that will determine the pace of recovery are:

• Interest rates — if the OCR rises sooner or more steeply than expected, affordability will tighten and price growth will moderate
• Employment confidence — particularly relevant in Wellington, where the public sector remains a major employer
• Buyer activity — first home buyers are currently a significant driver of market volume, and their continued participation is key
• Supply levels — inventory remains relatively elevated in Wellington, giving buyers more choice and limiting the upward pressure on prices

What This Means For You

Whether you are a first home buyer, an existing homeowner, or an investor, the current environment requires clear thinking rather than guesswork.

For first home buyers:
Prices are well off their peaks, competition is manageable, and lending conditions have improved. The risk of waiting is that if mortgage rates tick up or demand picks up more broadly, your buying power may reduce. Getting pre-approved and having a clear strategy in place makes sense right now.

For existing homeowners:
If your fixed rate is coming up for renewal, it’s worth reviewing your structure carefully. The case for longer fixed terms is strengthening given the signals from the Reserve Bank.

For investors:
The market is moving toward balance, and early-stage recoveries historically reward those who act before momentum becomes obvious. The Wellington rental market has softened, so ensure your numbers stack up with realistic rental yield assumptions.

For more information on what is right for you feel free book time with one of our team.