PHOTO: New data reveals NZ’s housing market simply hasn’t produced the gains a CGT needs — raising fresh questions over Labour’s timing and assumptions. Cotality (Formerly CoreLogic)
🏡 A Flat Market Meets a Fresh CGT Debate
As New Zealand drifts into summer, the property market is cruising in neutral — steady, predictable, and not exactly the cash machine a Capital Gains Tax (CGT) relies on.
The Cotality NZ November Monthly Housing Chart Pack shows national median values were down 0.1% over the three months to October, and still 17.3% below the 2022 peak. Some regions like Christchurch and Dunedin nudged upward, Auckland slipped slightly, and Invercargill hit a fresh high, showing just how uneven the landscape is.
Against this quiet backdrop, Labour’s announcement that it will campaign on a CGT in 2026 has reignited debate — but the real question is: would a flat market even deliver the revenue Labour hopes for?
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💬 “Interesting Timing” — Economist Raises Eyebrows
Cotality Chief Property Economist Kelvin Davidson says Labour’s plan landed while the market is “steady rather than strong.”
Under the proposal:
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28% CGT on net profit
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Applies to residential investment + commercial property
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Family home, farms, and financial assets excluded
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A new valuation day in 2027 sets the starting point
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Only gains after 2027 would be taxable
Here’s the kicker:
“For meaningful revenue, values need to rise. But national median values are only 10% higher than they were five years ago.”
In other words… not exactly a goldmine. 🪙
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📊 Market Stability = Cautious Optimism
Even with muted value growth, the market has surprising bright spots:
🔥 First Home Buyers on a Tear
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A record 29% of October purchases were FHBs
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Improved affordability and stable mortgage rates are giving them confidence
📈 Investors Creeping Back In
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Mortgage interest deductibility is back
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Multiple-property owners now make up just over 25% of transactions
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Lower rates are easing pressure on investor cashflow
Davidson says the stability is helping buyers reset expectations. No frenzy, no freefall — just normal.
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🏘️ Sales & Listings: Slow and Steady Wins the Race
Sales climbed 6% year-on-year in October, marking the 28th rise in 30 months since the downturn. As more households refix onto cheaper mortgages, the uplift is expected to continue.
Listings followed typical spring trends — rising, then quickly being absorbed by sales.
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Total stock remains 12% lower than the same time last year
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But still higher than the ultra-tight supply seen during 2020–2023
The balance between new listings and growing demand will be critical heading into the final months of the year.
🔮 Outlook: 2026 Could Be the Turning Point
Davidson expects firming conditions:
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Affordability at its best level in years
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Listings likely to ease
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Fixed loans resetting to lower rates
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Employment forecast to improve
If those factors align, sales volumes and values could lift gradually next year, not sharply — but enough to signal early-stage recovery.
📌 Where CGT Fits In
The November Chart Pack includes fresh context on how median values relate to the proposed CGT. With the market so flat, the real impact would depend on:
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How fast values climb post-2027
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How long investors hold before selling
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How commercial sectors perform
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How behaviour changes closer to the valuation day
Right now?
There simply isn’t much “gain” for a gains tax.
🏁 Final Word
New Zealand’s housing market is calm, cautious, and notably unglamorous. While Labour pushes the CGT conversation into the spotlight, the numbers tell a different story: this is a market moving in millimetres, not leaps.
A CGT might reshape behaviours — but in its current form, it’s unlikely to unlock the windfall some imagine.
Flat market = flat tax revenue.