NZ Reserve Bank Officials Weigh Uncertainty Over Stagnant Housing Market

New Zealand's Reserve Bank (RBNZ) officials are uncertain about the state of the country's housing market, considering it could be either a structural change or a normal cyclical pattern.

RBNZ chief economist Paul Conway stated that something has indeed changed in the housing market. However, he added that the central bank's forecasts still anticipate house prices increasing 'modestly' from about the middle of next year.

The RBNZ has been cutting its official cash rate (OCR) since August 2024, down to 5.25% by October 2025 and holding it steady until July this year, before raising it twice to 2.75%. Despite these cuts, house prices have been stagnant.

The Real Estate Institute's data shows New Zealand house prices were down 0.4% in the year ended July this year and are down 17% from the November 2021 peak.