Episode Details

New Zealands property market is undergoing a significant shift as mum-and-dad investors, who previously drove a third to half of all home sales, are now selling off properties at record rates. A survey of 200 landlords reveals that 38% plan to sell, while only 12% want to buy, marking a record pivot away from purchasing houses. Tighter bank lending rules and sky-high mortgage rates are squeezing these investors out, with debt-to-income caps limiting borrowers to six times income for owners and seven for investors. Two-year fixed rates have doubled from 3.46% in 2021 to over 7% by 2023, now hovering around 5%. The economic jitters and global tensions have led to a drop in sales volumes and low buyer confidence, with small investors feeling the brunt of the impact. Sellers are slashing asking prices by tens of thousands, struggling to unload properties from 2021. Mortgaged investors still made up a quarter of first-quarter sales, but this is way below old norms. This investor retreat could cool prices, opening doors for first-home buyers and pushing capital toward steadier spots like government bonds, resetting the market for real balance.

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