Property investors are back in the market. Photo: RNZ
Property investors are back in the market, but so far it's not at the expense of first-home buyers.
Cotality chief property economist Kelvin Davidson said while relocating owner-occupiers were more cautious than normal, first-home buyers were active "at elevated levels" and investors were making a steady comeback.
Investor activity has picked up to 24.6 percent of the market, compared to a low of 22 percent between 2022 and 2024.
They are 25.9 percent of the market in Auckland and 28.5 percent in Hamilton.
The only centre where they have not become more active is Wellington, where they are 23.6 percent of purchases.
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First-home buyers are responsible for 27.5 percent of property purchases.
Davidson said there was a "happy situation" where first-home buyers' market share remained high but investors were coming back, too.
"It illustrates you don't have to have one or the other, you can have both and at the moment we've got a decent market share for both those groups and also the number of deals is increasing because the property market is getting busier. So I think in general there's a bit for everybody at the moment."
Cotality chief property economist Kelvin Davidson. Photo: SUPPLIED
He said smaller-scale investors were most active. "Mums and Dads who might be buying their first rental or they might have one or two and they're adding to that portfolio."
He said lower interest rates were a big driver because they reduced the amount that people had to top up the rent to cover a mortgage payment.
"If you're putting in a top-up to a rental property that top-up might have been $400 or $500 last year now it could be $200.That's a lot less cash than it was."
Rental yields were flat, as were house prices. "Interest deductibility is back to 100 percent so that helps as well. The cash flow side has really turned around and historically we've seen a lot of investment returns come from capital gain.
"But of course you don't get the capital gain if you can't keep the property so cashflow is always a very important part of it and that has turned around a lot in the past year or two and that's the same whether you're in Invercargill or Whangārei."
He said any extra activity had the potential to push up prices but so far in 2025, mortgaged investors nationally had paid a median of $759,000, slightly down from $770,000 in 2024.
It is more than the $700,000 median first-home buyers paid, up from $695,000 last year.
He said the investor price drop was not because they were buying smaller properties.
"In fact, their share of standalone house purchases has edged up from 66 percent last year to 67 percent in 2025, still below first-home buyers and movers, where standalone dwellings account for 75 percent of activity each for the same period.
"You've got a few more investors in the market than there were a year ago but you've got fewer movers so I think it's hard to make the case at the moment that investors are pushing up prices and what we're seeing in our data is that they're paying a bit less than they were last year and still getting the same sort of size of property - standalone houses are a good strong share of what they're buying … the evidence that investors are currently bidding up prices is thin or non-existent, just look at how soft house prices have been lately."
He said investors seemed to be trying to find bargains and pushing hard on negotiations. "Nobody wants to overpay whether you're a foreign buyer or an investor or a first-time buyer you always want to pay market value."
He said investors were also buying a significant share of new builds, even though there were no longer tax advantages to doing so.
"They do tend to be a bit more expensive than existing properties and you perhaps don't get the renovation potential which is a big part of what some investors are doing in this flatter market but they're exempt from loan-to-value restrictions, exempt from debt-to-income ratios so deposit requirements are smaller. You might be able to get a bit more debt in relation to your income."
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