ANZ's economists have cut their house price growth forecast for this year to zero.
"Given soft near-term price momentum, we have trimmed our 2025 house price inflation forecast from 2.5% to around zero," they say in their latest NZ Property Focus report.
However they also expect the Reserve Bank (RBNZ) to keep downward pressure on mortgage interest rates by reducing the OCR from the current 3%, to 2.5% by the end of the year.
"This will support a gradual recovery in the housing market and the wider economy, and we continue to expect 5% house price growth in 2026," the report says.
"There is a chance that the Reserve Bank's easing stance triggers a quick lift in sentiment in the housing market, but we expect the shift in sentiment will be gradual given lingering headwinds from a soft job market and high inventories of property for sale," it says.
However the economists also point to the possibility of an eventual rise in interest rates.
"We also expect house price growth will be tempered by expectations that interest rates will eventually lift back up from low levels," they say in the report.
"While a lower OCR will reduce interest costs for a year or two, neither [we nor] the RBNZ nor the market expect lower interest rates to stick around for the longer term," they say.
"Buyers are likely to factor this in - it can also be seen in the fact that five year mortgage rates have dropped by much less than shorter term mortgage rates," the report says.
"On top of this, the cost of council rates and insurance is higher than it was in the past and rents on new tenancies are falling.
"This will collectively temper buyers' enthusiasm and the willingness of existing owners to hold on to property, even with a lower OCR," the report says.
23 Comments
No house growth....so the tax free debt farmers will have to grind it out for even further, while opex gets increased from the inflation they fueled. Poor lambs...
The average across the whole country is no growth. Regional prices probably show a different story
More milk-aging predictions from ANZ
A quote from Musical Chairs (on X) 'no NZ Govt in modern times has survived an election preceded by negative/stagnant house price growth'
This govt has misread their ability to quickly engineer a return to growth and a return to house price growth. The normal monetary transmission mechanisms have been weakened by the various LVR's ,CCCFA's, bank capital ratios and the mindset that productivity will naturally occur if you kill the housing market and step back and wait.
All that happens when you kill the housing market is that you kill the economy.
Make a better plan guys before you return us to the Hipkins days.
Unless you view the irrationally exuberant housing market as a runaway cancer on the body of the economy?
Still might cost the govt. its position though, agree with that.
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I attended a BNZ webinar earlier this week, similar overall picture however there was a graph that split property prices into key regions from a benchmark index point a year or 2 ago (b4 interest rate drop?).
Very clear that while Auckland Wellington at zero house price growth, Southland & Canterbury up 6-7%
Yes, the South Island is doing much better at the moment.
From January
Of the big four Australia-owned banks, Westpac is expecting a hike of 8.2% in prices this year and 5.1% in 2026, ANZ is plumping for a 6% increase this year and 7.7% in the year to March 2026, ASB is predicting a hefty 10.9% rise this year and 12.4% in the year to March 2026, while the BNZ is indicating a 6.5% hike.
Makes you wonder why they even publish these things, should be restricted to 10 day forecasts like the weather.
I trust the boss is being paid well for this output though.
Weather predictions tend to be more reliable though. The outlook for Thursday….your guess as good as mine
This BS Bankster house price gains predictions are just their HOPES AND DREAMS OF "WHAT THEY NEED TO HAPPEN"!!!
Their loan books go further underwater and are much more precarious, than what they are letting on currently.
The bad, risky loans they have all made over the last 5 years will come home to roost and drop their stinking negative equity DDDebt logs in the banks nest.
No bankster bailouts!! Go to the Aussie parent for new capital, when its eventually needed for the Sickman walking, NZ entities.
What's your prediction gecko, what are you HOPING
Down -4% in REAL terms.
I think the bank economists will have a pretty accurate forecast for house prices for the 2025 year, on the 30th of December 2025.
That comment made me laugh out loud, I wasn't expecting it. Whatever they predict for 2026 they'll obviously also keep updating throughout the year
These people are probably taking home a generous salary but have no more idea than a chimpanzee about what will happen. They are just a bit better at communicating BS
Bad loans are only modestly moving upwards at the moment. Also, with the strict borrowing rules they have to abide by, I hardly think they're too worried about the state of their loan books.
If house prices grow by zero this year, the OCR will be going lower than 2.5%.
💯
ANZ economists expect the OCR to be cut to 2.5% by the end of the year but point to it going back up at some stage
No risk taken there, lol. The rates will go back up at some stage… could be in 2084, but they will go back up "at some stage"
0% is a good hedge - saves them from getting the direction wrong
So actually down -2 to -4%, wherever the reflaring inflation lands, come late 2025!
The BS mantra by the REA industry, "property is a great inflation hedge" hahahahahaha: BEST TUI BILLBOURD THIS CENTURY.
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