Summarised by Centrist
New Zealand’s economy has slumped into its weakest period since the pandemic, with house values back to 2019 levels in real terms.
Building consents have collapsed, unemployment is rising, and net migration has dropped as more Kiwis move to Australia.
According to The Kākā’s Bernard Hickey, the government has “completed phase one to fire up house prices” by opening the top end of the market to foreign buyers, particularly in Auckland and Queenstown.
The move sits alongside a series of measures freeing up bank credit and pulling back on housing supply. The next phase could see Reserve Bank lending restrictions on loan-to-value ratios and debt-to-income limits eased in 2026.
At the same time, the government has introduced new visa pathways that are expected to drive demand for property. These include a “Parent Boost” visa allowing migrants to bring parents for up to ten years, a loosened foreign investor visa that cuts the cash threshold from $15 million to $5 million, and extended work rights for international students.
Housing Minister Chris Bishop has argued that the economy must decouple from house price inflation, saying: “Destroying the idea that the New Zealand economy should just be based on house price growth is a fundamental formula this government is trying to embed.” Yet critics note his words are at odds with policy moves that appear designed to reignite the market before the next election.
