In which I dare to make an economic prediction

What's Ahead for Property Investors?

by Nick Gentle on Sep 22, 2025
Article appears under: About Property Investment, The Numbers

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Hello investors!

Fresh from the coalface, here is what we are seeing, tracking and thinking about in property-land. 

The old joke goes that economists have predicted 7 of the last 5 recessions. Since I have no qualifications as an economist whatsoever, I thought I would throw my hat into the ring and share a couple of "reckons" on why I think we are at, and now moving through, the bottom. 

Before you send your letter to the editor in disgust... in my mind, the "bottom" is a curved parabola and not a pointy "V" so yes, there is going to be more bad economic news over the next 6 months. The recovery will be too late for some, and we will see closures, jobs lost, and restructures. There will be more businesses that have sadly passed a point from where recovery is not possible, and they lack the time, energy, or capital to stay active as the economy starts to pick up some steam. Construction is still in the doldrums, and related sectors like forestry and wood products have been hit hard by the construction pullback.

So why I am feeling more optimistic than the headlines in the Herald suggest I should be? Let me list some reasons...

Interest rates - last week June quarter GDP data came in sharply down. The economy has been bad. This will put pressure on both the RBNZ and the Government to move quickly and decisively. 

• The RBNZ's slow unwinding of high interest rates has not had the planned effect on the numbers they track, after they clearly overshot on the increases. Last week's data will only reinforce that, and already most bank economists are predicting that "the next cut needs to be a big one". Our 1 and 2 year swap rates both cratered last week. 
• The Government is running out of public faith and fast. I expect fiscal policy (investment, projects) to get fast tracked, which means jobs, especially in Wellington, where some good news is needed. 

But - and this is a big but - that data is now quite old. The June quarter is April 1 to June 30. Projections for more recent numbers are much rosier and some analysis has picked up on this.

House markets

• We are seeing a tightening of supply in several markets, and it is getting a bit tougher to find deals. I think this trend will only continue as interest rates keep falling.
• I'm sticking with my call from earlier in the year that 2025 is a buyer's market. I don't think 2026 will be remembered quite as fondly by buyers. DTIs will mean we won't see a whiplash back to growth, thankfully, but pressure will be upwards, so prices will turn and push up against whatever lending restrictions are now there. That will be because of....

Jobs - the biggie

• GDP data is months old. CPI data is also old. Jobs and hiring data from SEEK is the here and now and the here and now has suddenly ticked up in a big way. 
• Caveat: businesses that are in the middle of planning to restructure or close are still going to do so, sadly, so there will undoubtedly still be some bad news to surface. 

and...

Farming - the other biggie

• It is boom time for most of our primary exporters. I was in a small Waikato town a few weeks ago on a random Tuesday and every cafe was packed. It's not just dairy this time, with red meat exports also booming due to a global supply crunch. 
• When prices rose earlier in the year, the reporting I read was that farmers planned to get on top of debt and improve their finances. That was a few months ago and borrowing costs have continued to fall. In last week's Rabobank survey, farmers intentions to invest have risen sharply. 

Student numbers - A hint in a recovery in university numbers outside of Christchurch?

• Christchurch has become the trendy city for young people to move to and study at, but keep an eye out for stories like this one. School-leaver numbers cratered post-COVID, and a recovery in people completing their studies is welcome news.
• Combine that with international student numbers recovering, perhaps with an assist from the government, and the trend is improving quickly. 
• On a side note, I recently published an article on investing in student rentals. A great way for parents in particular to combine taking care of junior with setting themselves up for the long-term.

What does all of the above mean for property investors? My team reports more competition for deals in just about every market, and once the collective decides that we are on the up, I think the market will quickly shift. If you are sitting on the fence, I wouldn't do it for too much longer.

A couple of counter-arguments...

The big "but" - 2026 is an election year

Oh joy, another election is coming up. The good news for us is that Labour will be forced to be transparent about any intended tax changes. We don't yet know what they will include in their campaign. Rumours are that they will once again campaign on some form of a CGT, which has proven to be unpopular every other time they have tabled it (Jacinda's "captains call", anyone?).

I have heard they might try to target some investment assets, which would create a real mess just like "bright line" turned into in their watch - when occasional use as holiday home got captured, moving to another city for a year, renting there and renting out your house got captured, "is it a house or a farm?", and all sorts of other fun. I'll wager a fiver that whatever Labour comes in with, they will lose the narrative in less than a week.

A material jobs numbers lift is also needed

Our population trends will not improve until there is a sustained period of job growth, and not just a month's worth of help-wanted ads on Seek. With the current success in the primary sectors, a lower NZD and lower interest rates, projections are much better going forward, but people will vote with their feet until there is a reason not to. 

The most important idea - do it right and you'll do well in any market

iFindProperty made its name by knowing where to invest to capture some growth, where for cashflow, how to add both in a deal, and to make sure you buy well in the given market you choose. I've been doing this for long enough to know you can do badly in a hot market and amazingly well in a market that looks to be underperforming, so you can get a lot more certainty in your outcomes by working with a professional investor buyer's agent from our team. 

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