The phrase “property investment is dead” has echoed through coffee shops, online forums, and industry headlines in recent years. Amid skyrocketing house prices, tighter lending restrictions, and shifting government policies, it’s easy to see why some might think the golden era of real estate is over. But is it really?

The Headlines: Why Some Say Property Investment Is Finished

Recent years have seen dramatic changes in the property market across New Zealand:

• Rising Interest Rates: The cost of borrowing has increased, squeezing margins for investors and making it harder for newcomers to enter the market.
• Government Intervention: Policies aimed at protecting home buyers have sometimes made things tougher for landlords, with new taxes, and more rigorous tenant protections.
• Changing Demographics: Millennials and Gen Z are increasingly renting rather than buying, but they also want flexibility and high-quality accommodation.  Astutely, they are also seeing property as part of their investment strategy rather than the only investment strategy.
• Economic Uncertainty: Global changes, from pandemics to inflation, have disrupted property markets and investor confidence.
• Rising insurance and rates costs.
• Poor yields
• Poor forecast growth rates

Adaptation Is the Key

Despite these challenges, declaring property investment “dead” is premature. The market isn’t dying—it’s changing. Successful investors are those who adapt to new realities rather than cling to outdated playbooks.
 

New Opportunities for the Savvy Investor

1. Build-to-Rent Developments: Institutional investors are shifting towards large-scale rental projects, offering stability and long-term returns.
2. Short-Term Rentals: Platforms like Airbnb and Vrbo have opened new doors, though local regulations differ widely.
3. Commercial Real Estate: While offices have struggled post-COVID, logistics and warehousing are booming thanks to the rise of e-commerce.
4. Regional Markets: Investors are looking beyond city centres to smaller towns and regions where growth potential remains strong.
5. Sustainable & Green Investments: Properties with eco-friendly credentials are in high demand, offering both ethical and financial rewards.

Navigating Today’s Property Market

If you’re considering investing in property today, the rules have changed but the fundamentals remain. Due diligence, careful research, and a willingness to innovate are more important than ever. Consider working with local experts, exploring alternative investment vehicles, and staying up to date with regulatory changes in your area.

In short, treat is like a business because it is.  You wouldn’t buy a business just cause your uncle told you to or the neighbours bought one so you think you should, would you?

Final Thoughts: Resilience Over Nostalgia

While the classic image of the hands-off landlord collecting rent may be fading, property investment is far from dead. As with any market, change brings both challenges and opportunities. Those willing to adapt and learn will find new paths to success—and perhaps help shape the next chapter of real estate investment.

A property investor does need to have the ability to hold long term. 

Otherwise, you need to invest in with a lot of equity or assets behind you.  This is called having a week balance sheet.  You need a strong balance sheet to sustain any losses if you have to sell if markets drop.  You also need to have strong cashflow to sustain interest rate hikes.  Buying on a whim is not a option.

All investment classes move through cycles.  When is the best time to buy?  Not when everyone else is.
 
 

Disclaimer: This newsletter is meant to be informative and engaging, hopefully not a cure for insomnia.  Please don't take this as personalised financial advice.  Discuss your situation with an Advisor.  This is where I need to say past returns are no guarantee of future returns.