Budget overview
The 2026 New Zealand Budget was clearly focused on long term housing supply, infrastructure and planning reform rather than short term housing stimulus.
Unlike some previous Budgets, there were very few measures aimed at directly boosting buyer demand or rapidly lifting house prices. Instead, the Government focused heavily on the supply side of the market, particularly planning reform, infrastructure funding and improving the ability to build more homes over time.
This comes at a time when the New Zealand property market is still moving through a gradual recovery. House prices have stabilised across much of the country, sales activity has improved from cyclical lows and confidence has started to return. However, listings remain tight in parts of the market, residential construction activity remains weak and affordability continues to be a challenge for many households.
The key theme running through this Budget is that the Government wants to improve long term housing delivery rather than stimulate short term price growth. While many of these changes will take time to flow through the market, they should help improve development capacity, infrastructure delivery and housing supply over the medium term.
Economic outlook
Treasury expects the New Zealand economy to continue gradually recovering over the next few years, although near term conditions are expected to remain soft following weaker household spending, slower domestic activity and higher global oil prices.
Real GDP growth is forecast to increase from 1.2% in 2026 to 3.2% by 2028, while the unemployment rate is expected to peak at 5.5% in mid-2026 before gradually easing over coming years.
Interest rates are forecast to remain relatively stable, with the 90-day bank bill rate expected to increase gradually from 2.5% in 2026 to 3.3% by 2029 and 2030.
For the housing market, Treasury is forecasting a gradual recovery rather than a rapid rebound. House prices are forecast to decline by 0.5% in 2026 before rising by around 4.0% to 4.6% annually between 2027 and 2030.
Residential construction activity remains weak, with residential investment forecast to fall to 4.7% of GDP in mid-2026, close to post GFC lows. However, Treasury expects building activity to improve over the medium term as migration strengthens, wages rise and housing demand improves.
Treasury also noted that medium density and multi-unit housing continues to make up a larger share of new dwelling consents, reflecting affordability pressures and ongoing planning reforms across the market.
Overall, Treasury’s forecasts point to a housing market recovery that continues to build gradually over the next few years, although at a more moderate pace than previously expected.
Key real estate measures
Demand side measures
Accommodation Supplement increase
Accommodation Supplement maximum rates will increase by between $10 and $30 per week from April 2027. The measure is aimed at helping lower income renters manage ongoing cost of living pressures and rising housing costs.
This should provide some support for rental affordability and rental demand, particularly across lower income housing markets.
Higher social housing tenant contributions
Minimum income related rent contributions for social housing tenants will increase from 25% to 30% of household income. The Government said the change is designed to improve the long term sustainability of the social housing system and reduce future fiscal costs.
Over time, this may place additional pressure on some lower income households and could increase reliance on parts of the private rental market.
Supply Side Measures
Up to 2,250 additional social homes
The Government will fund up to 2,250 additional social homes through the Housing Flexible Fund. The programme continues the shift toward more flexible housing delivery through community housing providers and Māori housing organisations.
This should help support residential construction activity while increasing affordable housing supply over time.
$294 million planning and RMA reform package
The Budget includes $294 million over four years to support the replacement of the Resource Management Act and improve planning systems across New Zealand. The funding will support nationally consistent planning data, digital consenting systems, flood mapping and faster planning processes.
This is one of the more important long term property measures in the Budget, as it is aimed at reducing development bottlenecks and improving the speed and efficiency of residential and commercial approvals.
$400 million housing growth incentive fund for councils
The Government has allocated $400 million over four years to incentivise councils to support additional housing growth. Funding will be linked to new dwelling consent activity and is intended to help councils fund roads, water infrastructure and growth related services.
Infrastructure constraints remain one of the biggest barriers to housing supply in many parts of New Zealand, so this measure could help unlock additional development activity over time.
Development levy oversight reform
The Commerce Commission will oversee development levies charged by councils and water organisations. The reform is designed to improve transparency and reduce unnecessary development costs.
Lower development costs and greater oversight should improve project feasibility and support additional housing supply over the medium term.
National flood mapping and planning data upgrades
The Budget includes funding for national flood mapping and improved planning data systems. The initiative is designed to improve land use planning, development decision making and long term infrastructure coordination.
Better planning information should help reduce long term development risks and improve planning certainty across the market.
New Planning Tribunal
A new Planning Tribunal will be established to provide faster resolution of planning disputes. The Government expects the reform to reduce delays and improve certainty for development projects.
Over time, this should help reduce project delays and improve the delivery of residential and commercial developments.
Trades Academy expansion
Trades Academy places will double from 10,000 to 20,000 places. The expansion is designed to increase the future construction workforce and help address labour shortages across the building sector. Labour shortages have been a major issue for the construction industry in recent years, so increasing the future workforce should help support long term housing delivery capacity.
Other
The Budget also included several major health and regional infrastructure projects that are expected to support regional economic activity, construction demand and surrounding property markets over the coming years.
South Auckland hospital land acquisition
Funding has been allocated for land acquisition for a future South Auckland hospital.
Regional hospital redevelopment programme
The Budget includes funding for redevelopment planning at Tauranga, Palmerston North and Hawke’s Bay hospitals.
Whangārei Hospital redevelopment
Funding has been provided for a new ward tower at Whangārei Hospital.
Rotorua courthouse developments
The Government will fund two new Rotorua courthouses.
Final Thoughts
The 2026 New Zealand Budget was clearly a supply side focused Budget for the property sector.
Rather than introducing major first home buyer incentives or policies designed to rapidly lift house prices, the Government focused on long term housing supply, planning reform and infrastructure delivery.
The combination of RMA reform, council housing incentives, development levy oversight and planning system upgrades has the potential to improve housing supply responsiveness over time, particularly across growth corridors and medium density housing markets.
Treasury’s forecasts also point to a gradual housing market recovery rather than a rapid rebound. House prices are expected to rise moderately over the next few years, while residential construction activity is forecast to recover from current cyclical lows.
Overall, the Budget signals a more balanced approach to housing policy, with a much stronger focus on improving long term housing delivery and development capacity rather than driving short term house price growth.
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