More than any other year in recent history , 2025 is poised to provide significant and positive change for landlords nationwide .
Motivated by evolving legislation , tax policy , monetary policy , and market sentiment , many residential property investors are re-engaging with the market , presenting both a time of opportunity and caution . Here ’ s an update on what ’ s unfolding in the sector and what landlords need to pay attention to in the coming year .
POSITIVE MOMENTUM
It ’ s been a journey for residential investors over the last few years . However , 2025 is shaping up to be a banner year , with a hoard of positive change .
With a strong demand for rental properties and favourable market conditions , investors are increasingly looking at property management services to ensure they remain compliant and ahead of returns to leverage opportunities as they emerge .
At Ray White New Zealand , we ’ ve seen a notable increase in demand for our professional services . Recently , many landlords have asked , ‘ What is the current tenancy legislation status ?’
Interest has been exceptionally high among do-it-yourself landlords managing their own properties , which signals renewed appetite from landlords looking to capitalise on current opportunities but who have realised they require expert guidance to navigate an increasingly complex landscape .
One of the most significant changes impacting this appetite is the February reduction to the Official Cash Rate ( OCR ). The Reserve Bank of New Zealand ( RBNZ ) slashed the OCR by 50 basis points to a new cycle low of 3.75 percent , and further reductions are expected later in the year .
This decision set off a spree of lowered mortgage lending rates from banks , which has improved the cash flow position of many landlords . For property investors , this signals a chance to borrow at more favourable rates and enhance profitability in their portfolios .
RTA CHANGES : A KEY DEVELOPMENT
On 30 January , the government announced a slew of changes to the Residential Tenancies Act , including significant amendments to notice periods for the end of tenancies , tenure , and the sale process . More changes are expected in March , and another tranche will be confirmed later in the year .
These updates are part of a broader effort to address longstanding issues within the sector , and they present both challenges and opportunities for landlords .
Of particular importance is the ongoing shift in the legislation surrounding pet allowances . New rules are expected to mandate more relaxed conditions for tenants with pets , allowing landlords to adjust their rental policies and attract a broader range of tenants .
Rental properties currently allowing pets generally achieve higher rental values , making this a preferential point of difference . As with most changes , landlords who proactively adjust their property management practices can tap into this segment before the rule changes become mandatory .
The risk of non-compliance is also a growing concern .
A recent example from our team at Ray White highlights the importance of staying ahead of change : a landlord approached us after being fined nearly $ 10,000 for inadvertently breaching several new provisions , including rules regarding minor property alterations .
The case serves as a stark reminder that basic mistakes in the current climate can be costly , which is why our team continues to offer consultancy support to help landlords avoid these pitfalls and stay compliant .
HEALTHY HOMES AND COMPLIANCE DEADLINES
As the final compliance deadline for Healthy Homes Standards , 1 July 2025 , approaches , landlords must proactively ensure their rental properties meet these minimum standards .
With just four months or so remaining until the compliance deadline , landlords must immediately ensure their properties are up to code . This includes ensuring that properties meet minimum heating , insulation , ventilation and moisture control standards .
Failing to comply risks hefty fines and can affect your properties ’ rental appeal .
GAME-CHANGING TAX POLICY
One of the most significant changes for investors in 2025 is the full reintroduction of interest deductibility , which will take effect on 1 April . This will allow landlords to deduct the interest on their mortgage or loan from their rental income , reducing their taxable income and overall tax liability .
This change signals a shift from the complex tax landscape that landlords have navigated in recent years . For many , it ’ s a welcome step towards restoring the incentives to invest in rental properties privately .
This change will reduce the effective cost of borrowing , giving landlords more flexibility to expand their portfolios or improve existing properties . While the broader economic picture remains complex , the return of interest deductibility offers tangible benefits for investors , which could help improve balance sheets and increase investment returns .
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