NZ Economy Closes Gap with Australia Amid Slowing Growth

New Zealand's economy is showing signs of catching up to Australia's after years of lagging behind. Despite a slow recovery from the 2024 slump, NZ's annual growth rate has risen to around 1.5 percent and is expected to hold steady for the rest of 2026.

Australia's economic growth, on the other hand, is cooling down due to a tired consumer market and higher interest rates. GDP growth in Australia is predicted to fall from 2.1 percent to around 1.5 percent by the end of the year.

The difference in housing markets between the two countries has also narrowed. While Australian house prices have been falling since March, NZ's median house price remains 15 percent below its 2021 peak. The gap in affordability between the two countries is largely due to higher interest rates and lower disposable incomes in Australia.