House sales fall in April as rising fuel costs and rate hike fears hit demand

April marked the first clear sign of cost-of-living pressures weighing on house-buying activity. Photo / Ted Baghurst

House sales slid in April as rising living costs, fuel prices and the prospect of higher interest rates weighed on buyers, according to new figures.

The Real Estate Institute of New Zealand’s (REINZ) latest Property Report shows national sales in April fell 7.9% year on year.

The monthly sales count was down 21.2% compared with March, and 2.1% lower for seasonally adjusted data.

“April marks the first clear sign that the combined weight of cost-of-living pressures – higher fuel costs, food prices, insurance, and local body rates – began influencing buyer decisions in a meaningful way,” the report says.

Regions with higher vehicle dependency and lower median household incomes, including Hawke’s Bay, Manawatū-Whanganui and Marlborough, recorded the largest softening in activity as pump prices hit household budgets.

West Coast, Southland, Taranaki and Otago were the only regions where sales in April were higher than a year ago.

Westpac senior economist Michael Gordon said while April is typically a slow month because of the number of public holidays, sales were substantially lower than the same time last year.

“While there were signs of the housing market emerging from hibernation in early 2026 as the economy started to gain momentum, the Iran war has removed much of that support,” he said.

“Sharply weaker consumer confidence, weaker employment prospects, and the potential for [Official Cash Rate] hikes to come sooner and faster, imply a much weaker outlook for the housing market.”

Infometrics chief forecaster Gareth Kiernan said one month’s data wasn’t enough to be certain of a weaker trend for the housing market.

“However, April’s result fits with our expectations about the likely effects of the Iran war and higher fuel prices on the market, with sharply lower consumer confidence and increased uncertainty about economic prospects undermining people’s willingness to make major financial decisions,” he said.

Kiernan said sales growth had been slowing before the Middle East conflict.

“The widespread nature of the slowdown in sales suggests that no regions will be immune to the pressure on confidence and activity in the housing market,” he said.

“However, the spectre of rising interest rates later this year is likely to be felt most acutely in regions where house-price-to-income ratios are highest, such as Auckland and Wellington.”

According to REINZ’s Property Report, the national median price eased 0.6% year on year to $775,000.

The median price in Auckland rose 2.5% to $1.02 million.

Eight of the 16 regions recorded year-on-year increases in median prices, with the biggest gains in Southland and Northland (both +6.2%), Gisborne (+4.3%) and Waikato (+3.4%).

ASB senior economist Kim Mundy said a broad house price recovery is unlikely to be a 2026 story.

“The economic outlook is highly uncertain at this point, but the current trajectory suggests flat house price growth this year, with a non-negligible risk of a decline,” Mundy said.

“The absence of house price inflation means one less inflation fire for the [Reserve Bank] to fight, though it’s only likely to be a modest offset at this stage.”