Sales Volume Slump: Inside the 4.1% CPI Print and the Path to September

Residential property transactions across New Zealand have recorded six consecutive months of year-on-year declines. This week on the New Zealand Property Market Podcast, Head of Research Nick Goodall and Chief Economist Kelvin Davidson unpack the latest monthly Chart Pack data, revealing that first-half 2026 sales volumes reached 43,183 - down 4.2% compared to the same period in 2025. We explore why high listing stock and broader economic caution are keeping buyers and sellers in a stalemate, while noting that a lack of distress selling continues to keep the market anchored.

The guys also dissect the Q2 CPI inflation release, which landed at 4.1% annually. While slightly above the Reserve Bank's revised 3.9% forecast, the print landed directly in line with commercial bank expectations. We break down the stark divergence within the data: tradable inflation spiked to 4.9% off the back of global fuel pressures, while domestic non-tradable inflation eased slightly to 3.4%. Furthermore, annual rental growth has slowed to just 0.5% - the weakest rate of increase in more than two decades.

Finally, we discuss Stats NZ's official roadmap to introduce a monthly CPI release by August 2027, preview the upcoming July Home Value Index, and evaluate why the RBNZ remains firmly on track for an Official Cash Rate increase at the September 2nd statement.

This week we discuss:

• Six Months of Falling Sales: Why H1 2026 transaction volumes contracted 4.2% year-on-year, missing early expectations of a 5% to 10% recovery.
• Regional Sales Dynamics: Analysing the rolling three-month volume trends, from Dunedin’s 7.4% rise to Auckland’s 7.8% drop.
• The 4.1% CPI Reality Check: Breaking down the Q2 inflation print and why headline numbers drive consumer inflation expectations.
• Tradable vs. Non-Tradable Divergence: How fuel costs drove tradables to 4.9% while non-tradable domestic pressures softened to 3.4%.
• 20-Year Low for Rent Growth: What annual rental growth of just 0.5% means for residential landlord yields.
• The Path to September 2nd: Why the Reserve Bank is expected to push the OCR closer to its neutral target (~3.25%) despite weak consumer activity.
• Official Monthly CPI Roadmap: Stats NZ's timeline to transition from quarterly inflation tracking to monthly Tier-1 reporting by August 2027.

Sign up for news and insights or contact on LinkedIn, X @NickGoodall_CL or @KDavidson_CL and email ngoodall@cotality.com or kdavidson@cotality.com

This podcast is for educational and entertainment purposes only and does not constitute financial, legal, or tax advice. The hosts are not licensed Financial Advice Providers in New Zealand. All information is of a general nature and does not take into account your personal situation or goals. Please consult a qualified professional before making any financial decisions.