NZ Property Market Update 22 May 26 | Townhouses, rate rises and slow movements

The housing market has entered its “don’t make eye contact and maybe winter will pass” phase. Buyers are still around, but they’re cautious. Sellers are still listing, but not always loving the feedback. And banks? They’re starting to edge rates the wrong way again.

Cotality’s May Housing Chart Pack

Cotality’s May Housing Chart Pack shows April sales volumes were down 9% year-on-year, with national property values up just 0.1% in April and still 16.8% below the peak. Buyers are active, but cautious. Sellers are listing, but not always meeting the market.

Townhouses are under pressure

The big headline this week was townhouses. Cotality data showed 18% of townhouse resales sold for a loss in Q1, compared with 11% of houses. The median townhouse resale loss was around $49,500, before selling costs.

That does not mean the townhouse dream is over. But it does show that some peak-market, investor-style townhouse stock is having a tougher time, especially where supply has grown quickly.

Rates are nudging up again

Westpac lifted most fixed home loan rates this week, with its 1-year rate moving to 4.79% and its 18-month rate moving above 5%.

First-home buyers are still in the game

First-home buyers made up 28.2% of purchases nationally in April, and more than 30% in Auckland. Less competition, KiwiSaver, low-deposit lending and softer prices are still helping.

Rentals are soft

Rental growth remains weak, especially in Auckland and Wellington. That puts more pressure on investor numbers, but may give renters a little breathing room.

Budget watch

Budget 2026 lands next week. No lolly scramble expected, but any change to income settings, housing supply or investor confidence could flow quickly into the lending market.

That’s the TLDR this week.