New Zealand house prices expected to fall through mid-2027: report

WELLINGTON, Oct. 21 (Xinhua) -- New Zealand house prices are expected to fall further than previously forecast, with declines continuing through the first half of 2027 as higher interest rates weigh on the housing market, a report said Wednesday.

In the latest Property Focus report by ANZ, New Zealand's largest bank by home lending, the economists forecast house prices to fall 2 percent over 2026, compared with their previous forecast of a 1-percent decline. They expect prices to fall a further 1 percent over 2027, reversing their earlier forecast of a 2-percent rise.

The economists said they had downgraded their house price forecasts after adding expected official cash rate (OCR) hikes to their forecasts and seeing weakness in recent housing market data. The Real Estate Institute of New Zealand House Price Index was already 1 percent below its January level.

They expect the central bank to raise the OCR three more times, citing elevated oil prices, a weaker-than-expected exchange rate and continued economic growth, despite cautious consumer spending "in the face of the cost-of-living shock," according to the report.