The housing market's sluggish start to the year has left economists at ANZ New Zealand scratching their heads. Their latest Property Focus report reveals a lack of momentum in house prices, despite an improving economy. The report highlights several factors contributing to this stagnation, including a robust economy, rising consumer confidence, and tentative increases in net migration. However, these positive indicators are being overshadowed by a surge in housing supply, the possibility of an interest rate hike, and election-related uncertainty. Longer-term mortgage rates remain high relative to rental yields, indicating a potential barrier to price increases. As a result, ANZ has revised its 2026 house price inflation forecast downward to 2%, with the possibility of further decreases. The report emphasizes that the housing market's trajectory is uncertain, and the balance of probabilities suggests a slower rate of price growth than initially anticipated. For borrowers, the report advises considering a short-term mortgage fix with the intention of re-fixing for a longer term later in the year, but with a warning that this strategy could be risky if the market recovers faster than expected.
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