Advice matters
Key things to know before leaping into property investment

For many New Zealanders, property investment is a key part of their financial plans.

You don’t have to look far to find a story of someone who’s built significant wealth on the back of a property portfolio.

But as with any investment, it pays to do your research before you dive in.

Here are a few things to think about.

Know your market

New Zealand’s property market generally moves in cycles when it comes to sales prices. They rise for a while, then plateau or fall, before starting to lift again.

It is important to remember this, because depending on the stage of the cycle, it sometimes feels as if what is going to happen will continue forever.

A good way to get a sense of the market, what is happening and what could be on the horizon, is to monitor data releases such as that from the Real Estate Institute and CoreLogic. Bank economists also put out regular market forecasts, which can help to give you an indication of what is expected.

If you’re looking to invest in your local neighbourhood, it could also be a good idea to get out and get a sense of it first-hand. Heading along to open homes and auctions, and chatting to local salespeople, can help to give you a taste of the mood in the market – as well as whether a property you’re looking at is a good buy compared to others in the area.

Sites such as and OneRoof can be useful to find out what prices properties have sold for recently.

For most investors, the rental market is the other part of the equation. Stats NZ provides regular updates on rent movements and you can use the Government’s Tenancy Services site to check what the market rent is for a particular area. Local property managers should also be able to give you a sense of what sort of properties are in demand with tenants and how easy it might be to let any home you’re looking at.

Your financial readiness

A good first step in your investment process could be to meet an adviser to look at your current financial situation. Do you have enough deposit or equity to borrow? How much might you qualify for?

When you’re investing, you need to have enough cash flow to not only cover costs such as your home loan repayments, but to have a buffer for things that might pop up unexpectedly, such as repairs and maintenance, or periods where the property might be empty between tenants.

An adviser can help you work through what this might look like for you and any potential investments you are considering.

Your goals

It is often a good idea to set out your investment goals before you jump in. What are you investing for? Are you hoping to have a nest egg for retirement? Is it to help your children into the market when they are older? Or are you hoping for cashflow?

The goals that you have may influence the type of property that is appropriate for you. Some areas, or even properties within an area, may be more likely to experience capital gains, while others – particularly smaller properties or in cheaper areas, could provide more cash flow.

Identifying your goals at the outset will help you to create a strategy that is more likely to get you there. You can also consider how a property investment might work in with the rest of your investment portfolio.

It may also be helpful to book an appointment with a mortgage adviser early in the process to talk about potential loan structures and which lenders might be appropriate to work with.

Ready to talk?

If you’re ready to talk, drop us a line. We can help you determine what your current situation is, how a property investment might fit in with your overall investment strategy, and the next steps to take to get you closer to your financial goals.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.