In this episode, Matthew Harris, Adam Farrell, and Michael Vincent sit down to unpack what’s really driving the New Zealand property market as we head into the year ahead. Drawing on market cycles, interest rate movements, and election uncertainty, they share their 2026 property predictions - what growth could look like, where confidence may wobble, and how investors should think about opportunity in a changing market.
What the outlook says about house price growth in 2026
The outlook for house price growth in 2026 is centred on moderation rather than excess. Expectations sit well below the double-digit surges of previous cycles, with estimates ranging from around 3–4% at the conservative end through to 5.5-6% under more optimistic conditions.
The emphasis is on stability. Steady growth supports business confidence, consumer spending, and access to capital, while sharp spikes tend to undermine long-term confidence. From this perspective, the predictions for 2026 point to a healthier, more sustainable market – one that allows the economy to function without the distortions seen during boom years.
There is also an acknowledgement that the year is unlikely to move in a straight line. Early momentum could be followed by a period of caution mid-year, particularly if Reserve Bank commentary or market reactions influence wholesale rates.
Interest rates, elections, and market confidence
A major theme throughout the discussion is how confidence – not just pricing – will shape the year ahead. While lower interest rates typically support property values, Michael Vincent highlights that markets still move in cycles, and those cycles can be disrupted by policy signals and political uncertainty.
An upcoming election is expected to weigh on buyer behaviour, particularly later in the year, as people pause decisions until outcomes are clearer. At the same time, a new Reserve Bank Governor has been vocal about acting if the market heats up too quickly, creating the possibility that even small policy shifts could cool momentum.
Taken together, the outlook for 2026 is cautiously optimistic – but sensitive. Confidence may build quickly, yet it remains vulnerable to changes in rates, language from policymakers, and election-driven hesitation.
How different property types are expected to perform
Not all property is expected to move at the same pace in 2026. A consistent theme throughout the episode is that quality assets are likely to outperform, while average or poorly executed stock may lag.
Townhouses
Well-located, high-quality townhouses in desirable neighbourhoods are expected to see stronger demand and better growth outcomes. Limited supply and buyer preference for quality are key drivers. In contrast, lower-quality developments – particularly those built by less reputable developers or with compromised design – may struggle to keep pace with inflation.
There is also an expectation that buyer selectiveness has a shelf life. While purchasers are currently able to be highly specific about what they want, that flexibility is unlikely to last as better stock is absorbed and competition increases.
In-situ residential properties
As with other cycles, premium stock is expected to transact first and at stronger prices. As momentum builds, remaining stock may begin to move more quickly, often at higher prices than would have been achieved earlier in the cycle.
Multis and commercial property
Cashflow is becoming increasingly important, particularly as investors look for assets that can better support rising costs. Multis are viewed as attractive due to diversified income streams and reduced vacancy risk, especially where renovations can unlock additional value.
Commercial property continues to attract interest due to comparatively stronger yields, although access and risk mean it is not suitable for every investor. For some, multis provide a stepping stone between residential and commercial investment.
Capital gains tax and political uncertainty
The potential re-emergence of capital gains tax as an election issue is acknowledged as a source of short-term uncertainty. The view shared is that any introduction would likely cause a temporary pause in confidence rather than a fundamental shift in long-term market behaviour.
Historical examples suggest markets tend to adjust, recover, and continue tracking underlying fundamentals over time. While investor behaviour may change briefly, supply, demand, and economic growth remain the dominant drivers of property values.
Timing, headlines, and getting ahead of the cycle
A clear warning is given around relying too heavily on headlines. Media sentiment often lags market reality, meaning the best opportunities are frequently gone by the time optimism becomes widespread.
As soon as confidence returns, competition increases quickly. Buyers who wait for certainty often find themselves paying more, competing at auction, or missing out altogether. Being prepared – financially and strategically – is positioned as the most effective way to move ahead of the cycle rather than chasing it.
Key takeaways
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Price growth expectations for 2026 are moderate, not speculative
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Stability is viewed as healthier for both the property market and the wider economy
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Quality assets are expected to outperform average and low-quality stock
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Cashflow-positive strategies are becoming more important
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Elections and policy signals may cause hesitation, not long-term disruption
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Waiting for positive headlines often means missing the best opportunities
Next steps
If you’re considering entering the property market or reassessing your portfolio, the Lighthouse Property team can help you prepare early, structure cashflow effectively, and position yourself before conditions tighten.
If you’d like to watch more, check out these other episodes below.
For a no obligation discussion to see how we can help you on the path to wealth, please contact us.
Disclaimer:
The information in this article is general information only, is provided free of charge and does not constitute professional advice. We try to keep the information up to date. However, to the fullest extent permitted by law, we disclaim all warranties, express or implied, in relation to this article – including (without limitation) warranties as to accuracy, completeness and fitness for any particular purpose. Please seek independent advice before acting on any information in this article.
