ASB Housing Confidence Survey: Falling price expectations good news for buyers

As rising interest rates and the Middle East conflict dampen confidence in the housing market, buyers remain firmly in the driver’s seat, with favourable buying conditions expected to last into 2027, according to ASB's latest Housing Confidence Survey.

ASB’s survey reveals house price expectations continued to slide in the three months to July, with just a net 9% of New Zealanders expecting prices to rise in the next year, down from 30% at the start of 2026.

Auckland saw a large drop in price optimism, to net 4%, from net 14%. Buying sentiment in Auckland strengthened, with net 26% saying it’s a good time to buy.

In contrast, price growth expectations sit at net 23% in Canterbury and 18% across the rest of the South Island, despite some easing over winter.

The widening confidence gap between the North and South Islands highlights the difference in regional markets. Auckland’s median house price fell 3.6% in the year to July, while Canterbury recorded a 1.2% rise, according to REINZ July data.

ASB Acting Chief Economist Kim Mundy says the market has quickly adjusted to the rising interest rate environment.

“Fixed mortgage rates had started to tick up in the first half of the year, in anticipation of the OCR rising over 2026. Our survey suggests households are closely watching the Reserve Bank and anticipating what the impacts of the Middle East conflict could mean for borrowing costs.

“More than six in ten New Zealanders now expect interest rates to be higher in one year's time. This widespread expectation that borrowing costs will rise is likely to keep a lid on house prices and preserve buyers’ bargaining power for the rest of the year,” says Kim.

Falling house price expectations are keeping buyer sentiment resilient, with a net 20% of respondents saying now is a good time to buy.  While higher mortgage rates and living costs will be weighing on house affordability, a steady flow of new-build homes and slower sales activity are giving house-hunters more choice and negotiating power.

"The current market offers relatively decent buying opportunities, and we can see this in the strong presence of first-home buyers in the market. Buyers have more choice, more time to make decisions and more clout at the negotiation table than in recent years."

Looking ahead, ASB expects the housing market to remain subdued through the rest of 2026, before improving from 2027.

"We can't rule out a small fall in house prices in the coming months, but we're expecting conditions to gradually improve through 2027, as fewer New Zealanders move to Australia, population growth strengthens and the broader economy gains momentum.”

ASB’S Housing Confidence Survey canvasses thousands of Kiwi each quarter on their expectations for house prices and interest rates over the next 12 months, and whether it’s a good time to buy a property.

The full survey is attached, and can be accessed at the ASB Economic Insights page.