The most challenging period for landlords may now be behind them, according to ANZ.
New lending to property investors has increased by around 50% in the past year, according to ANZ Senior Economist Matthew Galt, who said the rebound reflects a gradual return to stability in the market after a prolonged period of disruption.
With the Reserve Bank expected to resume cuts in the August OCR announcement, some investors believe the next 12 months could represent a window of opportunity for property investors, as falling interest rates and recent tax changes support improved rental return potential.
Galt characterised the Reserve Bank’s July 9 hold on the official cash rate as “more of a breather” than a shift in direction.
“We still expect several cuts over the next year, which could take the OCR down to around 2.5%,” he said.
Galt noted that key operating costs have largely stabilised. “Interest rates have decreased, while insurance and maintenance costs have levelled off, meaning the numbers work more favourably for landlords — even as council rates continue to rise.”
Council rates have climbed by 7–12% annually across many regions, with further increases expected this year. At the same time, rents on new tenancies have declined 2.7% year-on-year – an uncommon trend outside significant economic downturns.
Galt said the market remains weighted in favour of buyers for now, with extended selling periods offering investors greater flexibility when negotiating ahead of any rate reductions. He forecasts house prices to increase by 2.5% in 2025 and 5% in 2026, supported by a lower OCR and a gradual economic recovery.
Grant Knuckey, ANZ Managing Director, Personal, said confidence among investors had “absolutely picked up” in recent months. “The environment, on balance, is positive for investors, which is why activity has picked up so measurably,” he said.
One factor has been the return of mortgage‑interest deductibility.
“It changes the cash flow equation straight away,” said Knuckey. “It’s a shift from the perspective of the long‑term cash flow implications of the borrowing that you’re doing.” As always, he noted that landlords should seek independent tax advice on how the rules apply to their situation.
Knuckey reported ANZ’s home lenders were seeing a mix of seasoned landlords and first-time investors seeking guidance.
“We have specialist lenders who day in, day out deal with residential investors. They’ve seen lots of different scenarios and can provide the right assistance, especially for someone doing this for the first time,” he said. “Our 10-year interest-only option has been popular recently because it can help maximise some of the benefits of structuring a loan – provided it matches the borrower’s circumstances.”
Whether it’s your first investment property or your fifth, ANZ says getting the loan structure right from the outset – especially in a changing rate environment – can make a material difference to long-term outcomes.
Knuckey said investors looking for yield are often drawn to smaller towns. “If you look purely at market data around yields, it’s actually the smaller centres that often have the higher yields,” he noted, adding however that most landlords still prefer to buy where they know the market and have local trades contacts.
Borrowers are also shopping around in greater numbers. “Switching activity hit 30% in June, the highest ever recorded. The home-lending market is extremely competitive right now,” Knuckey said.
He stressed ANZ is focused on retaining existing customers as well as winning new ones. “We’re constantly tweaking our policy settings to stay attractive and compete,” he said, adding that ANZ also sharpens its fixed and floating rate offers to remain competitive. “We’ll always compete. We want to retain every customer, and we want to bring new ones to ANZ too.”
Digital tools are a key part of ANZ’s offering. “The goMoney app is one of New Zealand’s top-rated digital banking tools, and it’s become essential for customers who want to manage lending and banking digitally,” he said.
Knuckey noted most investors generally take a long‑term view. “They’re weighing up today’s factors, like rates and costs, but ultimately they’re thinking about how that investment will perform over 10 years or more.”
He said ANZ aims to build equally long‑term relationships with its customers, supporting both first‑time investors and those with large portfolios.
With borrowing costs expected to ease further and key expenses levelling out, both Galt and Knuckey see conditions improving for landlords willing to prepare early and think long term.
ANZ understands that each investor is different, and encourages prospective and current property investors to talk to a specialist lender about their unique circumstances.
To find out more about property investment with ANZ, speak with an ANZ Mobile Mortgage Manager or visit anz.co.nz/personal/home-loans-mortgages/investment-property/.
ANZ lending criteria, terms, and fees apply. Minimum 30% deposit may apply to property investment lending. This material is general nature and is for information purposes only. The opinions in it are not financial, investment or tax advice. Please talk to ANZ if you need financial advice about your situation and goals. See ANZ’s financial advice provider disclosure at anz.co.nz/fapdisclosure.
