Decoding 2026, The Great Bank Switch & Hidden Mortgage Costs Ep. 3

The New Zealand property market is showing signs of life, but the real story lies in the regional data and current mortgage trends. In this episode of New Zealand Property Insights, Paul and Debbie Roberts unpack the new Cotality Decoding 2026 Report and the record-breaking surge in bank switching.

In this episode, Paul and Debbie cover:

• The 2026 Market Outlook: A deep dive into the latest Cotality report. While 71% of respondents expect house prices to rise in 2026, the data reveals a mood of cautious optimism rather than a massive boom. The hosts discuss the significant regional split, contrasting Canterbury's strong confidence against Wellington's lagging market.
• The Danger of "Free" Advice: Debbie explains why "free" financial plans from property companies are often designed purely to sell commission-based properties. She highlights why securing independent financial advice is crucial to ensure you aren't paying top dollar for an underperforming investment.
• The Great Bank Switch: In December 2025, a record-breaking $5.8 billion in lending was driven simply by borrowers switching banks to chase cashback deals. Paul and Debbie explore whether these cashbacks actually save money, warning investors about hidden break fees and clawback periods. They also share actionable tips on how to negotiate better rates with your current bank using a mortgage adviser.

Whether listeners are looking to refinance or wondering where the property market is heading next, this episode cuts through the noise to provide the facts.

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00:00 Intro Music 00:06 Introduction: Unpacking the Cotality 2026 Report 00:18 Topic 1: The 2026 Market Outlook & "Cautious Optimism" 01:35 Regional Property Split: Why Canterbury is outperforming Wellington 01:54 Interest Rate Reality: Are OCR hikes coming? 04:10 The Danger of "Free" Financial Advice & Sales Pitches 04:52 Strategy: Creating your own capital growth through renovations 05:51 Topic 2: The Great Bank Switch & Record Refinancing 06:47 Who is moving banks? The reality of cashback offers 08:03 Warning: Break fees, clawbacks, and the true cost of switching 08:39 Mortgage Advice: How to negotiate better rates with your bank 10:08 Summary & Next Steps: Free Property Investing Event

Transcript

Paul: 0:00

Hi, and welcome back to New Zealand Property Insights. I'm Paul Roberts.

Debbie: 0:03

And I'm Debbie Roberts. We are the owners of Property Apprentice and we are here to help you navigate the New Zealand property market with facts and our opinion. Today we are diving into the new Cotality Decoding 2026 Report. The headline says, 71% of Kiwis expect house prices to rise. But we are gonna look at why cautious optimism is the real story.

Paul: 0:27

And then we're gonna be looking at, are you chasing cashbacks? We look at the record breaking $5.8 billion in bank switching last month. Is moving banks for a cash payout actually saving you money, or is it costing you more in the long run? So first of all, the 2026 market outlook. We've just had the release of the Cotality Decoding 2026 Report, and it paints a very interesting picture of where our heads are as a nation.

Debbie: 0:55

The headline number is, at 71% of respondents expect house prices to rise in 2026. And that sounds bullish, but when you dig into the details the mood is actually one of cautious optimism rather than a boom. We are entering a period of measured growth. So while we look at 71% of the people surveyed who expect house prices to rise, only 14% anticipate growth of more than 5%. The majority are predicting modest gains. There's a massive split across the country. Canterbury's the most confident region with 87% expecting house prices to rise, whereas Wellington continues to struggle with most respondents expecting it to underperform the national average due to public sector job uncertainty,

Paul: 1:44

interest rate reality following the Reserve Bank's cut of the official cash rate to 2.25% in November, 2025, sentiment has actually shifted. Fewer people now expect further cuts the shift from the cut in November. 54% expected the rates drop further. In 2026, that number has now fallen to 43%. The wholesale marketers anticipate an increases in interest rates towards the end of 2026 and or early 2027. The thing I love about the report is that debunks the myth of the New Zealand property market. There is no single market. You've got Canterbury firing all cylinders, 87% confidence, and then you've got Wellington where confidence is significantly lower than that.

Debbie: 2:33

Exactly. Uh, if you're an investor looking at the headlines seeing prices rising, you might buy in the wrong area. You need to look at local economics. The report explicitly says that Wellington is lagging because of the jobs market. There's also an awful lot of vacant rental properties in Wellington. And an increase in homelessness, I mean, seems to be an obvious solution somewhere in the mix there. But Canterbury, for example, is outperforming many areas at the moment because it's affordable and has better rental returns. And there are plenty of other examples just like that across the country.

Paul: 3:09

So let's look at the interest rates. The OCR has been at 2.25 since November, which is great compared to where we were a few years ago, but the report suggests people are realizing that the next move from the Reserve bank is more likely to be an increase than a decrease. The right question is when that will be.

Debbie: 3:29

The key takeaway here, it's currently a stable, flat to rising market, which is actually a really good time to buy if you know how to negotiate and if you're buying the right property for your financial position. I mean, anyone with a deposit and who can get enough lending from a bank can buy a house. That's the easy part. The hard part is keeping that sucker for 10 years if you've bought something that you shouldn't have bought, or if you've been sold the dream that turned out to be a nightmare. As a financial adviser that doesn't sell properties, I've been shocked at how many people have had bad advice about buying an investment property? So many companies offer their financial plans for free, but they're designed purely to sell you a property that they get a commission for.

So let me ask you this: 4:17

does that sound like free financial advice to you? Have they got your best at heart or are you paying top dollar for an underperforming investment? And just hoping for the best because the salesperson's projections looked good.

Think of it like : 4:33

free often actually just stands for forever requiring endless expenses.

Paul: 4:41

Absolutely. So in the current market, you can literally make money when you buy. You can make money with a pen and create your own capital growth by adding value to the property or renovating it. A lot of people say, oh, I haven't got time to do that. It doesn't matter. You might be taking it on as tenanted, and you've got that backup to do that at some point, whether it's renovating or adding a minor dwelling. So yet, ironically, according to a recent survey, the majority of buyers in the current market are looking for properties that are either new or newly renovated. This is, um, massive opportunity if you want to get the results that most people get. Copy them. If you want to get the results that most people don't, you have to do something different. You've gotta go against the grain. Just remember that most people don't retire wealthy. In fact, the majority of New Zealanders retire barely above the poverty line.

Debbie: 5:37

Exactly. So don't do what most people do. Mm-hmm. Is the moral of that story.

Paul: 5:42

Yeah.

Debbie: 5:42

Alright, so next segment, let's have a look at the Great Bank Switch and who really pays.

Paul: 5:47

Finally, we're looking at the apparent trend in the mortgage market right now. That is the Great Bank Switch.

Debbie: 5:54

Yeah. Reserve bank data for December, 2025 showed a record breaking$14.1 billion in new lending. But here's the kicker, A huge chunk of that$5.8 billion was just from people switching banks like taking their mortgage from one bank to another bank, and that's more than double the previous refinancing record, the surge was caused by switching, which accounted for 41% of all lending activity in December. Up from a previous high of 30%. The driver was all about those cashback deals. Banks were aggressively offering up to 1.5% cashbacks in November, and many borrowers took the bait. Who's moving? Kelvin Davidson from Cotality notes that borrowers with large loans and large incomes are the main players here, because obviously if you don't have the provable income to switch banks at the moment, then you're not gonna be able to do that. So people with large loans and large incomes have got the leverage to get the best deals out there.

Paul: 7:02

Mm-hmm. The pass the parcel game. Uh, David Cunningham from Squirrel, uh, warned that this is a zero sum game. New customers get the cash, but existing loyal customers often foot the bill through higher interest rates than necessary. The interest rate trade off cunningham also said that if banks weren't spending millions in Cashbacks, we might see a one year fixed rates down at 4% already. Instead looks like Cashbacks. Um. Looks like it will be the game, that new back battleground that we have. So this confirms exactly what we tell our clients here at Property Apprentice. The bank is not your friend. Even if you've been a loyal customer for 20 years, we don't care what color the bank is, whether it's red, blue, green, yellow. It doesn't really matter. Just show me the money. Gimme a good rate. Gimme a cash back.

Debbie: 7:55

Absolutely, but you do have to be careful 'cause switching isn't always free. You might have break fees on your fixed rates or clawback periods if you took a cash back deal less than three years ago. You can't just switch banks every six months and keep expecting cash back deals forever. I mean, that'd be great. You'd pay off your mortgage pretty quickly, but the banks are never gonna give away money completely for free. Also, not all banks are created equal. Depending on your income source, financial position, and personal requirements, some banks will be better for you than others.

Paul: 8:30

So the key takeaway is negotiation. You don't always have to switch banks to get a better deal. Often threatening to leave or having a good mortgage broker on your side that can present to a competitor's offer to your bank might be enough for them to match the rate or offer a cash repayment.

Debbie: 8:49

Absolutely. Banks are still competing for business and they can be negotiable on interest rates for existing customers, but usually only if you ask. So don't sit on your hands .If your fixed rate is coming up, ask your bank the question, what's the best that you can do for me? Or better yet, get a mortgage adviser who's got better access to a wide range of different banks to see who will give you the best overall deal. The best part of working with a mortgage adviser is that it costs you nothing. They get paid by the lender when you get lending, but it has got a huge benefit of allowing you to leverage your time and also gives you the advantage of working with a lending specialist who works in your best interest because they work for you, not for the bank.

Paul: 9:37

So that wraps up this week's, New Zealand Property Insights and, it's a good time to be buying if you know what you're doing and you know your numbers and you know what to look for.

Debbie: 9:47

It's a property market with a lot of moving parts, but just remember, problems often create opportunities for people who are more informed. If you are listening to this and thinking, I need to get my own strategy sorted, we'd love to help.

Paul: 10:02

Absolutely. And Debbie runs weekly events called How to Succeed with Property Investing, where we go much deeper into what's happening in the property market, how to best structure mortgages and interest rates, purchase investment properties, and how to reduce the risk when investing in property. So please come along.

Debbie: 10:19

These online events are completely free, and it might just be the most valuable couple of hours you spend this week. They're live and online, so you can ask me as many questions as you like, and I'll answer as many as I can in the timeframe that we've got. You can find the link to the show notes or go to www.propertyapperntice.co.nz.

Paul: 10:39

Thanks.

Debbie: 10:41

See you next time.