As we move into 2026, there are early signs that confidence is starting to return across the New Zealand economy. Business sentiment has lifted to its strongest level in more than a decade, supported by easing interest rates and improved expectations around investment and activity. After several years of uncertainty, that shift is meaningful.

The housing market itself remains subdued, but economists are increasingly pointing to 2026 as a potential turning point. We are not expecting a sudden rebound. Instead, confidence appears to be rebuilding gradually as borrowing costs ease and buyer sentiment steadies. In our view, the second half of the year is where momentum is most likely to start showing through.

Government policy is also moving in a more supportive direction. The housing and planning reforms that have been announced have the clear intention of increasing supply and reducing development barriers. These changes focus on streamlining planning processes, freeing up land for development, and accelerating housebuilding to address long-standing affordability challenges.

Find out more about the planning reforms aimed at unlocking housing growth and the simpler rules for granny flats, sheds and garages.  

Taken together, improving business confidence and policy reform are creating a more constructive environment for development and construction. While recovery will be gradual, the overall direction of travel is more positive as we move through 2026.