ASB House Price Forecast Revised Down: Flat 2026 NZ Outlook

New Zealand’s major banks have spent the past few years learning a humbling lesson: predicting house prices is harder than it looks. After earlier forecasts of 3–6% growth proved too optimistic, ASB has now joined ANZ and BNZ in sharply revising its outlook for 2026. The result is a housing market consensus that barely moves at all — and a growing gap between what economists hope will happen and what the data keeps showing.

ANZ 2026 Forecast: −2% (down from 5%) ·
BNZ 2026 Forecast: 0% (revised from +2%) ·
ASB Latest Action: Revised down to flat ·
NZ Market Trend: Three years of flat prices

The table below consolidates the key figures across the major banks and the Reserve Bank.

Will NZ house prices go up in 2026?

The short answer from New Zealand’s biggest banks is a definitive “not by much.” ASB’s March 2026 Quarterly Economic Forecast predicts flat house prices (0% growth) to March 2026, a stark contrast to earlier optimism from multiple institutions that had penciled in 3–6% growth for the year (OneRoof property market analysis). ANZ’s revised Property Focus now expects a −2% decline, reversing an earlier 2% increase projection, citing rising mortgage rates and global uncertainty as headwinds (MacroBusiness economic reporting).

ASB’s revised forecast details

ASB chief economist Nick Tuffley expects a slight pickup in 2026 but has been clear this will not resemble a dramatic boom. The bank attributes its cautious stance to elevated listings and an inventory overhang that continues to suppress price momentum (OneRoof property market analysis). Past forecasts from multiple banks — including ASB’s own earlier projections — have consistently overstated growth, with predictions of 5–6% for 2023 resulting in actual declines, and 3–5% growth predicted for 2024 landing flat (MoneyHub NZ forecast tracker).

Comparisons with ANZ and BNZ

The three major banks now share a remarkably similar outlook: flat or near-flat for 2026. BNZ’s Markets Outlook, released in September 2026, projects 0% growth — down from a prior +2% forecast — with real prices potentially falling to 2016 levels by mid-2027 if current conditions persist (MacroBusiness economic reporting). Westpac has gone further, predicting a −1% decline for 2026 after previously expecting 4% growth. Reserve Bank NZ’s February 2026 Monetary Policy Statement sits at the extreme end of caution, projecting just 0.03% house price growth to December 2026 (Opes Partners forecast compilation).

Will mortgage rates drop to 3% again?

For borrowers who remember the sub-3% era of 2020–2021, the answer from economists is an uncomfortable “not soon.” BNZ expects floating mortgage rates to reach 6.0–6.5% by the end of 2026, a significant increase from current levels (MacroBusiness economic reporting). Both ANZ and BNZ expect the Reserve Bank to lift the Official Cash Rate (OCR) in late 2026 — ANZ anticipates the first hike in December 2026, while BNZ projects increases in both September and December 2026 (ANZ Property Focus report).

ASB home loan rate trends

ASB’s own rate guidance aligns with the broader industry consensus: mortgage rates will remain elevated through 2026, with fixed-term options offering some relief for those willing to lock in. However, the era of sub-3% rates appears to have closed for the foreseeable future, with economists pointing to persistent inflationary pressures and global energy shocks as factors that could keep rates higher for longer (MacroBusiness economic reporting).

2026 outlook from experts

The consensus among bank economists is that mortgage rates will remain a headwind for housing activity through 2026. ANZ’s Property Focus notes that rising mortgage rates have shifted from a tailwind to a headwind for house prices, a reversal from the low-rate environment that powered the market’s 2020–2021 boom (ANZ Property Focus December 2026). CPI inflation is reportedly expected to remain above 4% in 2026 due to global energy pressures, which limits the RBNZ’s ability to cut rates (MacroBusiness economic reporting).

Should I fix my mortgage in 2026?

The decision to fix a mortgage in 2026 involves weighing certainty against potential future rate cuts. With the RBNZ expected to hike the OCR twice in late 2026, and BNZ forecasting floating rates at 6.0–6.5% by year-end, locking in a fixed rate now offers protection against further increases (MacroBusiness economic reporting). However, historical bank forecasting accuracy suggests caution: past predictions of rate cuts have frequently proven premature.

Pros and cons of fixing now

On the pro side, fixing at current rates protects against OCR hikes that ANZ and BNZ both anticipate in the final quarter of 2026. With house prices expected to remain flat to negative, locking in a predictable mortgage cost could provide useful stability for household budgets. On the con side, if inflation moderates faster than expected, borrowers who fix now may find themselves paying above-market rates once the RBNZ eventually pivots to cuts.

UK borrower insights adapted to NZ

UK mortgage fixing patterns offer a loose parallel for NZ borrowers considering term length. In the UK market, borrowers choosing 2-year fixes have historically benefited when rates subsequently dropped, while those on 5-year terms avoided mid-cycle volatility. In the NZ context, with OCR hikes anticipated but uncertain in timing, a mid-term fix (3 years) may offer a reasonable balance between certainty and flexibility.

Will mortgage rates go down to 3% in 2026?

The data suggests this is unlikely to happen within the 2026 calendar year. ANZ’s Property Focus downgraded its 2026 inflation forecast to 2% from an earlier 5%, but this still reflects a persistent inflation environment that limits the RBNZ’s room to cut rates (ANZ Property Focus). BNZ’s expectation of floating mortgage rates at 6.0–6.5% by end-2026 further reinforces that sub-3% fixed rates are not a realistic 2026 expectation (MacroBusiness economic reporting).

ASB interest rate forecast

ASB’s economists, while acknowledging the potential for economic improvement, see mortgage rates remaining elevated through 2026. The bank’s forecast reflects a market where the RBNZ is actively hiking rather than cutting, creating an environment where rate relief for borrowers is not on the immediate horizon.

Broader NZ trends

House prices have now been flat for approximately three years as of early 2026, according to ANZ’s Property Focus analysis (ANZ Property Focus December 2026). This extended period of stagnation suggests that rate normalization alone may not be sufficient to reignite price growth, with structural factors like housing supply, regional population shifts, and global economic conditions playing increasingly important roles.

Should I fix for 3 or 5 years?

The choice between a 3-year and 5-year fixed mortgage term in 2026 hinges on two competing pressures: the immediate threat of OCR hikes through late 2026, and the possibility that inflation moderates enough to allow rate cuts in 2027–2028. BNZ and ANZ both expect the OCR to rise through the end of 2026, which argues for locking in current fixed rates to avoid the higher floating rates that would follow hikes.

Term comparison factors

A 5-year fixed rate typically carries a premium above 2–3 year rates, reflecting the lender’s commitment to hold rates stable over a longer horizon. However, borrowers who fixed for 5 years in early 2021, at rates below 3%, have benefited significantly as floating and short-term fixed rates have climbed. Conversely, those who chose shorter terms have faced refinancing at progressively higher rates. The lesson from recent history is that certainty has value when rate trajectories are upward, but locking in for 5 years carries the risk of being overcharged if rates eventually fall.

NZ-specific advice

For NZ borrowers in 2026, a 3-year term may offer the best balance: it provides protection against the anticipated 2026 OCR hikes, while retaining flexibility to benefit from potential rate cuts in 2028 or 2029. ASB chief economist Nick Tuffley’s expectation of a “slight pickup” in 2026 — but not a dramatic boom — suggests the bank does not see a major rate-cutting cycle on the immediate horizon that would make a 5-year fix unnecessarily expensive.

What economists are saying

The human element behind these forecasts provides context that spreadsheet projections cannot. Multiple economists have offered candid assessments of the current market.

“Overall, despite an improving economic backdrop, 2026 looks set to be another year of little movement in house prices.”

— ANZ NZ Economists, Interest.co.nz market report

“Our best guess is house prices will rise by 5 to 7% over 2026. Call it 6% to sound precise.”

— Jarrod Kerr, Kiwibank chief economist, OneRoof property analysis

New Zealand’s housing outlook has weakened sharply as the Middle East conflict reshapes the macro environment.

— Mike Jones, BNZ Chief Economist, MacroBusiness economic reporting

expects a slight pickup in 2026 “but not a dramatic boom”

— Nick Tuffley, ASB chief economist, OneRoof property analysis

Related reading: Home Loan Rates Forecast 2026

This flat 2026 outlook unfolds alongside NZ consumer finance law changes that are reshaping lending at major NZ banks like ASB and ANZ.

Frequently asked questions

For NZ property buyers and investors weighing their next move, the picture from ASB, ANZ, and BNZ is consistent in one respect: 2026 is unlikely to deliver the price growth that earlier forecasts suggested. Borrowers weighing whether to fix their mortgage face a familiar calculus — pay a premium for certainty now, or gamble on a rate-cutting cycle that economists cannot agree on. The three banks most directly involved in NZ mortgage lending have collectively abandoned optimism, and that signal alone carries weight.