Kicking off 2026 | January update

As we kick off the first Colab newsletter of the year, it feels like a good time to take stock of where things landed at the end of 2025 and what we’re seeing as we move into 2026.

A quick word on banks, cashbacks and turnaround times

The last few months of last year had the most demand for refinances that I’ve seen in a long time. The combination of falling interest rates and 1.5 percent cashback offers on the table generated a huge amount of activity, and to be blunt, bank assessment teams were largely overwhelmed.

Turnaround times pre-Christmas were incredibly slow across most banks. The good news is that things have settled again. Since returning in January, turnaround times for home loan approvals have improved noticeably and they’re now closer to what we would consider ‘normal’.

Have interest rates hit the bottom for this cycle?

Towards the end of the year, we also saw banks’ own funding costs creep up slightly. That meant they didn’t pass on as much of the most recent OCR cut as many borrowers were hoping for. The general feeling now is that we are either at, or very close to, the bottom of the interest rate cutting cycle.

That said, there are still some very sharp deals available. One and two-year fixed rates in the mid 4 percent range are now common, and in some cases first home buyers are being offered one-year rates starting with a 3. This is great news for borrowers and creates a much more supportive environment for home buyers.

Confidence and activity starting to lift

I’m speaking regularly with agents, developers and new home consultants around the country, and the consistent theme is an uplift in enquiry and buyer confidence. Lower interest rates are clearly helping, and most forecasts are pointing to a gradual lift in house prices as we move through 2026.

Just before Christmas, I had the chance to attend and speak at the launch of the Babich Rise subdivision in Henderson Valley, a short stroll from Babich Winery. It was encouraging to see a development that has genuinely listened to the market, delivering good sized sections in the 450 to 600 square metre range rather than squeezing density at all costs. These are the types of projects that tend to attract long-term buyers and owner occupiers. If you’re curious, you can have a look here.

New builds and why they still stack up

For buyers, new builds continue to offer some real advantages. They remain exempt from the Reserve Bank’s LVR (loan-to-value ratio) and DTI (debt-to-income) restrictions, which can make a meaningful difference, particularly for first home buyers and those with smaller deposits.

Banks are also generally more supportive of higher LVR lending where the purchase is a new build, often offering sharper pricing compared with existing homes.

At Colab, we work closely with buyers and builders from the early planning stages right through to settlement. If you’re looking to build, our New Build Guide is a great place to start and walks through the process, funding structure and common pitfalls in plain English.

If you’re looking to buy your first home, our First Home Buyers Guide is a comprehensive resource covering deposits, KiwiSaver, bank criteria and what to expect along the way.

A quick update on TurnKey Pro

From a construction and development perspective, it’s been a strong start to the year.

Through TurnKey Pro, we’re currently funding two spec builds in Invercargill, which is a good reminder that quality projects don’t just exist in the main centres. We’re happy supporting builders and developers wherever the numbers make sense.

TurnKey Pro is built around how builders actually work, supporting both section purchase and build funding without unnecessary line fees or bank hurdles. If you’re thinking about spec builds, turnkey projects, or a showhome this year, I’m always happy to have an early chat about funding options.

Goodbye “survive till 25”, hello “get in the mix for 26”

It feels fair to say we can finally retire the “survive till 25” mantra. With confidence improving, activity lifting and funding becoming more accessible, 2026 is shaping up as a year to get involved rather than sit on the sidelines.

If you’d like to talk through your plans, explore funding options, or simply get a sense check on what’s possible, feel free to give me a call or book a time into my calendar here.

Here’s to a positive year ahead and getting in the mix for 26!