Monthly Property Insights

The Cotality Home Value Index rose by 0.2% in February, more than reversing January’s minor -0.1% drop, with the latest result the strongest rise in four months. Now let’s be clear – February’s increase was nothing major and, given the cautious attitudes that still prevail from both buyers and sellers, it’s not out of the question that values dip back down again in March. But the fundamentals are slowly shifting towards the upside for house prices and February’s lift was more broad-based too.

Each of the main centres increased in February

Indeed, one aspect that struck me most about the latest figures was the wider geographical spread of the increase. Auckland was only up by 0.1%, but that’s still a shift in direction from a series of falls in the previous months. In addition, Christchurch was up by 0.6%, and Dunedin and Hamilton both by 0.9%. There were also hefty increases in other ‘provincial’ areas such as Invercargill and Whanganui.

Invercargill is one of a handful of markets where house prices are at new peaks, with that group also including Gore, Timaru, and Ashburton. Affordability will be playing a role, but so too is the strength of the farming sector, which will be generating confidence and cashflow in those economies, hence flowing through to the housing market too.

Which buyer groups should we watch in 2026?

Amidst that backdrop, the Cotality Buyer Classification figures have continued to show resilience from first home buyers, as they tap into the high LVR lending allowances at the banks and get that initial step on the ladder without the standard 20% deposit. Indeed, 57% of first home buyer loans in January were done at less than 20% equity. I suspect FHBs will remain a solid presence this year.

Meanwhile, mortgaged multiple property owners – including the cliched Mum and Dad investors – have returned to around their normal market share (25%), but may trend sideways from here. On one hand, factors such as lower mortgage rates are a key support. But rents are weak, costs are up, and they’ll also be mindful of the DTI caps and any discussion around capital gains tax.

My hunch is that movers, or relocating owner occupiers, could be a growth segment in 2026. They’ve been quiet for a long period of time now, but as the economic cycle turns, they may start to come out of the woodwork again, looking to trade up, downsize, or even shift around the country.

A note on current global conflict

Meanwhile, just touching on the latest conflict in the Middle East, things are moving so fast, it’s hard to make any particularly meaningful conclusions. At the time of writing, most expectations are that it will produce an oil-driven, near-term spike in inflation, but also that the longer it lasts the more the economy will suffer – hence pulling inflation back down again in the medium term. As such, the Reserve Bank may not be rushing to make any changes to the OCR. We all just have to hope the conflict ends soon, both from a human life perspective and the economy.

To wrap up …

There’s still a lot of uncertainty around and the housing market isn’t likely to race away this year. But the economy does look a little better and interest rates remain broadly stable. With that in mind, house price upturns always have to start somewhere and, maybe, February was that marker.

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