FINDING BALANCE
New Zealand’ s economic outlook is delicately balanced. While core inflation is easing, the cost of living relative to incomes remains high, driven by persistent increases in food, energy, and regional council rates.
At the same time, the labour market is softening, particularly for younger and lower-income workers, which is putting pressure on household budgets and dampening overall confidence.
“ For landlords, this means your tenants may be feeling the financial pinch more than ever,” says Snelling.“ Rent increases, even if justifiable, may be harder to implement, or harder to sustain, without risking tenant turnover or arrears.”
It also means investors need to be increasingly strategic about affordability, value, and long-term retention.“ The government’ s current focus is productivity, not property,” he adds.“ And the RBNZ now has an expanded toolkit to cool housing-related risk, including debt serviceability testing.”
In this environment, investors who maintain well-managed, compliant, and reasonably priced properties are more likely to attract and keep good tenants and stay on the right side of market and regulatory trends.
“ While the macro conditions may at first appear challenging, they also reward those with discipline and a forwardthinking approach. If you’ re prepared, this is a moment to strengthen your portfolio, not retreat from it.”
STRATEGY BEATS SENTIMENT
Much like compliance, investment strategies are not‘ set and forget’. Snelling says that property ownership – once the great Kiwi ambition- is undergoing a cultural shift.
“ Younger investors are increasingly drawn to more non-traditional asset classes such as equities and cryptocurrency, sometimes favouring digital assets over bricks and mortar. That said, they still need homes to rent, so demand isn’ t going away.”
Older investors, meanwhile, are re-evaluating whether to hold, sell, or restructure portfolios for retirement. The result is a shrinking pool of landlords, but consistent pressure on rental stock.
“ There’ s another kind of investor, one that isn’ t chasing wealth for its own sake, but time freedom. These landlords are focused on funding lifestyle passively. They’ re playing smarter and making more calculated decisions.”
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5 THINGS TO WATCH
MORTGAGE RATES FALL FURTHER Improving cashflow and servicing for landlords.
HOUSING INFLATION Forecast modestly at 5-7 % by 2026
TIGHTER RENTAL DEMAND Well-located, well-managed rentals will attract strong tenant interest.
TAX SETTINGS Landlords benefit from a more favourable tax environment.
REGULATION TO STAY Compliance expectations are high, engaging professional property management is key to staying protected and profitable
Some of the most attractive returns today are coming from investors willing to look beyond main metropolitan areas.
“ Regional centres across Waikato, Bay of Plenty – including Gisborne are showing strong rental demand, while building activity remains slow and acquisition costs are more accessible. These pockets offer stronger gross yield potential and better prospects for rental income growth. Short-term income with long-term upside,” he says.
“ If you’ re a landlord, there is no time like the present to optimise your strategy. Talk to your property manager about opportunities. Revisit your rental assessments. Consider pet-friendly policies. Review your insurance. Engage your mortgage advisor. Communicate with your tenants.
“ This isn’ t a time to sit back, it’ s time to lean in. While the market may seem still on the surface, the next wave is already forming, and those who are prepared will be best placed to ride it.”
For more information about Ray White’ s Property Management offering, visit pm. raywhite. com.
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