After a period of cooling due to government regulations, rising interest rates, and broader economic uncertainty, property investors in New Zealand are making a noticeable comeback. Recent market trends indicate a growing confidence among buyers, spurred by stabilising interest rates, a strong rental market, and renewed optimism in long-term capital gains.
In fact, CoreLogic NZ data shows that investor purchases rose to 27% of total sales in early 2025, up from 23% a year earlier (CoreLogic NZ, Apr 2025). Westpac forecasts also predict 6 – 8% house price growth over 2025, ideal for investors who want to benefit from capital gain over time (Westpac NZ, Mar 2025).
Whether you’re a seasoned investor or a first-timer considering an additional property purchase to grow your wealth – now is an opportune time to explore the benefits of expanding your property portfolio.
This resurgence isn’t just about snapping up any old property, many investors are eyeing new builds as their go-to strategy for entering (or re-entering) the market, and there are some solid reasons why.
The appeal of a second property
Buying a second property in New Zealand has long been a strategy for building long-term wealth, and it’s making sense again for many Kiwis.
Why property investment is back in demand:
Several factors are driving renewed interest in property investment in New Zealand:
- Equity leverage: Homeowners with built-up equity in their first property can use it to secure lending for a second one, effectively growing their portfolio without needing a large cash deposit. Properli Advisers are experts at helping you achieve this.
- Diversification: A second property, especially if located in a different city or region, offers risk diversification. One market may dip while another stays strong.
- Passive income stream: With rental prices surging by 8% nationally over the past year (Trade Me Property NZ, Dec 2024), investors might see strong cash flow potential.
- Future planning: Some investors buy second homes with an eye on retirement, whether it’s a beach house, a city apartment, or a future family home.
- Stable long-term growth: Property remains a reliable asset class, offering both capital appreciation and passive income. CoreLogic NZ also reports that median property values are trending upwards, with steady 3–5% annualised growth expected through 2025 (CoreLogic NZ, Apr 2025).
- Low housing supply vs. high demand: Many markets still face a housing shortage, keeping rental demand strong. Migration is expected to remain high, with net migration topping 110,000 people in the year to March 2025 (Stats NZ, Apr 2025), further tightening rental supply.
Why new builds are gaining popularity
- Tax benefits: One of the most attractive perks of buying a new build is the interest deductibility rule. While this has been phased out for existing properties, it still applies to new builds for a set number of years—meaning investors can claim their mortgage interest as an expense, significantly reducing tax bills.
- Lower maintenance costs: New builds come with modern materials, appliances, and warranties. This not only makes them attractive to tenants but also means fewer unexpected repairs and lower ongoing costs for the investor.
- Healthy homes compliance: Meeting Healthy Homes Standards is non-negotiable in our rental market. With new builds, compliance is baked in, no need for costly retrofits or upgrades.
- Stronger tenant appeal: Modern layouts, energy efficiency, and better amenities make new builds more desirable for tenants. Rental vacancy rates remain low at around 1.8% nationwide (MBIE, Apr 2025), indicating strong ongoing tenant demand.
- Deposit requirements: Some banks require lower deposits for new builds compared to existing homes. This can be a game-changer for investors looking to leverage their equity or get a foot in the door with a second property.
The NZ property market is evolving, and savvy investors are adapting with it. With tax advantages, modern amenities, and high tenant demand, new builds in New Zealand offer a compelling path for those looking to invest wisely. Whether you’re looking for high rental yields, capital growth, or portfolio diversification, now is a great time to explore your options.
As always, it’s important to do your research, seek professional advice, and consider both the risks and rewards. But for many, the resurgence of property investment in New Zealand could signal a new era of opportunity for you and your financial future.
Considering expanding your property portfolio? Speak to our team.
