With falling prices and growing uncertainty, it’s fair to ask - are Kiwis giving up on property? Despite public sentiment shifting, property remains a long-term asset, and with the right strategy, there’s still plenty of opportunity.
Is Property Still a Good Investment?
The property market has taken a hit. In May 2025, house prices fell 0.9% year-on-year, and sales volumes dropped by 23%. Over 34,000 homes are currently listed – double the volume seen during the boom – and 22,000 mortgages were past due in early 2025. Add in mortgagee sales rising 12% year-on-year and it’s no surprise some are losing faith.
But while it might look bleak on the surface, giving up on property could be a short-term reaction to a long-term opportunity. As the hosts of Cheques and Balances explain, property has always performed well over time – just not without its cycles. In fact, for first home buyers, now might be the best time in the last 15 years to enter the market.
Why Some Kiwis Are Giving Up On Property
Kiwis are facing affordability pressures: house prices remain six times the average household income, and many first home buyers are increasingly dependent on the Bank of Mum and Dad. At the same time, confidence is being shaken —- with projections showing that 40% of retirees could be renting by 2048, the idea that property ensures financial security is being questioned.
It’s also clear that many investors were unprepared. People jumped into property with little planning, relying on historically low interest rates without building buffers. Those who worked with a mortgage broker and planned for interest rates between 7–9% – not 2% – were better equipped to ride out the bumps.
Property Still Has Strong Fundamentals
So why is property still a good idea? One word: leverage. Unlike other asset classes, property lets you borrow to invest, which amplifies your returns over time. Even if long-term growth slows from 6.5% to 5%, when you layer in leverage, it still performs exceptionally well.
While capital gains tax may eventually come into play, the ability to borrow remains a unique advantage. Pair that with inflationary pressure – as incomes rise, borrowing capacity improves – and property continues to deliver consistent long-term value.
Smarter Strategies for Today’s Market
Today’s first home buyers are more cautious and pragmatic. They’re choosing homes that are within budget, focusing on solid investments that don’t compromise financial wellbeing.
Plus, it’s a buyer’s market. There’s less competition, more listings, and stronger negotiating power. Buyers can complete due diligence after agreeing on a price, rather than before an auction, saving thousands in valuation, legal and building report costs.
Shared equity, low deposit options (even 5% loans), family guarantees, and KiwiSaver contributions are helping more Kiwis into their first homes – without the need to lean too hard on the Bank of Mum and Dad.
Key Takeaways
- Property is a long-term asset, and short-term market dips don’t erase its historical performance.
- Mortgage stress, rising listings, and flat prices have shaken confidence, but they also create opportunities for buyers.
- Leverage remains a key advantage of property investment – even if capital gains slow.
- Today’s buyers are savvier, avoiding overextension and prioritising affordability.
- With more listings, slower competition, and flexible deposit options, it’s a strong market for first home buyers.
- Investors need to reset expectations and plan around realistic returns and tighter conditions.
- Apartments, while affordable, haven’t seen the same long-term growth as standalone properties.
- Planning with a broker can help avoid FOMO-driven decisions and build long-term financial resilience.
- Long-term growth is likely to remain positive due to inflation and housing demand.
- Smarter buying strategies and better education make today’s first home buyers more prepared than ever.
Next steps:
Ready to buy your first home but not sure where to start? Chat with our mortgage team they’ll help you structure your loan, stress test your budget, and find the best deal for your situation.
If you’d like to learn more, check out these other episodes below.
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Disclaimer:
The information in this article is general information only, is provided free of charge and does not constitute professional advice. We try to keep the information up to date. However, to the fullest extent permitted by law, we disclaim all warranties, express or implied, in relation to this article – including (without limitation) warranties as to accuracy, completeness and fitness for any particular purpose. Please seek independent advice before acting on any information in this article.
