NZ Market Update: 2025 Snapshot
Before diving into the five reasons, let’s take a look at the current property investment backdrop in New Zealand:
- The median NZ house value reached approximately $812,195 in March 2025, according to CoreLogic — one of the highest levels in recent years.
- Another benchmark from REINZ puts the median price at around $770,000 as of June 2025.
- Gross rental yields across the country now average about 4% (3.99%), as reported in 2025 Q3 — attractive compared to recent years.
- CoreLogic also notes that yields have risen to their highest levels since 2015–16, now sitting at approximately 3.9%.
This shows that, despite some price corrections, property remains a resilient investment — especially with improved rental returns and continued market interest.
Exploring Income Property Investment Benefits
With over half a million property investors in New Zealand, it is clear we are not the only ones who think this! Historical trends suggest that owning an income property is one of the safest and most secure ways to grow wealth.
Of course, past performance isn’t a guarantee of future performance. What’s more, with our modern global economy, there are more ways than ever before to invest your money. It’s about choosing what is right for you. This is where we help.
Property investment generally remains a time-tested strategy for building long-term wealth in New Zealand. Contact us for a chat or apply on-line for us to assess your situation. Before diving in, you may want to brush up on the key investment property mortgage options to ensure your lending structure aligns with your goals. Start your journey with a free assessment.
1. Passive Rental Income
Income Property Investment Benefits: Cashflow and Consistency
With market related rent, and the right tenants, income properties provide a consistent rental return. Whether you have invested in a standalone house, apartment, or a multi-unit dwelling, the monthly rent you receive provides cashflow that can help cover mortgage and other costs. Yes, rental income helps to:
- Cover loan repayments and expenses
- Provide supplementary income
- Build long-term wealth as rents rise over time
2. Capital Growth Potential
Long-Term Wealth and Income Property Investment Benefits
Over time, New Zealand’s property market has historically delivered strong capital growth. Short term fluctuations do occur, as we have recently seen, but property values increase over the long term. Generally, this results in wealth accumulation, especially in high-demand areas. Drivers promoting capital growth are:
- Location, location, location
- Proximity to amenities
- Market cycles and population growth
- Renovations or upgrades to the property
3. Leverage the Bank’s Money
Maximising Income Property Investment Benefits with Leverage
“Leverage” lets you use borrowed funds to amplify your returns.
Example: Imagine you want to buy a $500,000 house, and you invest $100,000 and borrow the remaining $400,00 from the bank.
Now, if the house value goes up to $600,000, you have earned $100,000 – a 100% return. So, you only invested $100,000 but get the profit of the full value of the property at $600,000. Without leverage, you couldn’t have bought the house and make that gain. ie. Your return is amplified since gains are based on the full value of the property, not just your deposit.
A great advantage is that you don/t need to sell the property to realise this growth, since it can be accessed via refinancing. Banks are on board and specifically supporting investment in new builds, with a major bank even offering a “Blueprint to Build” initiative which gives a discount on its floating rate for new builds. Deposit requirements vary by lender and property type. In some cases specialist lenders may offer lower-deposit pathways. For a full breakdown of deposit rules, see our upcoming 2025 deposit guide (coming soon).
Example: ROI 2020 vs 2025
Let’s compare how returns look if you purchased an income property in 2020 versus 2025. These figures are based on the median national rent and house prices in New Zealand:
| Year | Median House Price | Median Weekly Rent | Gross Yield |
|---|---|---|---|
| 2020 | ~NZ$705,000 | ~NZ$620 | ~4.6% |
| 2025 | ~NZ$770,000 | ~NZ$574 | ~3.9% |
In 2020, using a Christchurch suburb as an example, a property priced around NZ$705,000 delivered a weekly rent of about NZ$620, resulting in a gross yield of approximately 4.6%. By 2025, with the median national price rising to around NZ$770,000 and average rent at approximately NZ$574 per week, the gross yield falls to around 3.9%.
What to read next: Wondering how much deposit you’ll need to start investing? Explore our 2025 deposit guide (coming soon).
4. Tax Advantages (Speak to a Professional)
Exploring the Tax Perks of Rental Property Ownership
Whilst not all property investors qualify, there may be tax benefits including deductibility of some expenses related to the property ownership. With recent changes to tax-deductibility rules, as of June 2025, you could claim 100% of interest payments. A registered tax adviser can provide guidance tailored to your situation and will explore the tax benefits of income property.
5. Long-Term Financial Security
How Rental Property Supports Long-Term Financial Security
An investment property can be a powerful asset in your retirement planning. Once the mortgage is paid off, the rental income can supplement your retirement income. Alternatively, the property can be sold to access a lump sum. This long-term stability is one of the most attractive income property benefits for Kiwis.
What to read next: If you’re not sure how much deposit you’ll need or where it could come from, explore our 2025 deposit guide which will be published shortly – keep an eye open for it.
Ready to Begin Your Investment Journey?
Speak to us today about how to begin or grow your property investment portfolio. Our experienced mortgage broker will guide you through the options and help secure a lending structure that supports your goals.
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