Property investor sentiment shows signs of levelling out, even as concerns build over tenancy law and tax settings
Property investor sentiment appears to be stabilising after several years of decline, even as landlords flag growing unease over possible changes to tenancy law and tax settings, according to independent economist Tony Alexander's latest monthly survey for The Property Consortium.
Buying and selling intentions level out
The survey of 225 investors found that the long slide in the proportion of landlords considering another purchase has flattened out since early this year, following a pullback that began after the pandemic-era buying boom.
Selling intentions appear to be following a similar pattern, having plateaued since late last year after climbing through 2023 and 2024. Netting the two measures off against each other, Alexander found 23% of investors are currently weighing up a sale.
There's also a modest uptick in landlords planning to hold onto their properties for longer, with a small recovery in the proportion saying they intend to hold for a decade or never sell — another sign, Alexander suggested, that the broader decline in investor interest from three to four years ago may be running its course.
Tenant availability easing, but new concerns emerge
Landlords continue to report difficulty finding tenants of their preference, though Alexander noted that trend "may be on a slight downward track" after concerns rose sharply from mid-2024.
Rent rise intentions have also nudged upward recently, which Alexander linked to New Zealand's inflation rate, now at 4.1%, alongside the slight easing in tenant-finding difficulties.
Council rates and insurance costs remain investors' two biggest concerns, though worries about insurance have been on a slow downward trend, which Alexander attributed partly to new offshore competition entering the market. That broad balance in bank attitudes matches what brokers themselves are reporting — a companion survey of mortgage advisers found banks easing up on lending in July, even as overall demand stayed subdued and investors continued to lag first-home buyers.
Concerns about tenant regulation changes and the possible loss of interest deductibility are both trending higher, a shift Alexander linked to the approaching general election.
"Once bitten twice shy may be the factor in play here," he said, referring to investors' wariness given past changes to deductibility rules.
The uncertainty is real —Labour has yet to confirm its position on deductibility ahead of the election, with mortgaged investor purchase activity already pulling back 5.7% amid the uncertainty.
Where investors are looking to buy
Asked where they'd invest today, half of respondents pointed to just four regions: Canterbury, Queenstown Lakes District, the Bay of Plenty, and Southland — areas home to less than a quarter of New Zealand's population.
Queenstown Lakes stands out as the most extreme outlier, drawing 10.9% of investor votes despite housing just 1% of the population, a variance of 990%. Southland shows a similar, if less pronounced, pattern, attracting 6.3% of votes from just 2% of the population. Canterbury is the most-favoured region in absolute terms, at 26% of votes, but given it already holds 13.1% of the population, its overperformance is comparatively modest.
At the other end of the scale, Auckland — home to 34.1% of New Zealanders — attracts just 30.2% of investor votes, while regions such as Northland, Waikato, and Manawatū-Whanganui rank well behind their population share, with Northland showing the steepest underperformance at 74% below its population weighting.
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