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27 minute read
NZ Property Investor Lending Falls 11%: What’s Behind the Pullback?
From rental income and borrowing costs to tax policy, here’s what current market conditions could mean for property investors.
Nurain Nadzirah
12 October 2026
New lending to New Zealand property investors fell 11% year-on-year in August, dropping to $1.40 billion, according to the RBNZ's latest lending data.
But does that mean investors are stepping away from the property market?
Not necessarily.
The latest buyer data points to a more cautious and selective market, with several pressures making investors think harder about taking on new debt.
Investors Are Waiting for a Bargain
Investor demand remains weak. A net 46% of agents reported fewer investors looking to buy, with little change since April.
For investors who are still looking, finding a bargain remains one of the main reasons to buy.
But with property values continuing to soften, there is less expectation of quick price gains, with values now having fallen for a sixth month in a row.
Election Uncertainty
The upcoming election adds another layer of uncertainty for property investors, with the possibility of changes to existing tax rules.
Capital gains tax, wealth taxes and other proposed changes to the tax policy could affect the costs and returns associated with owning an investment property.
That makes it harder for investors to assess what a new purchase could look like over the longer term, particularly when property values and rental returns are already under pressure.
Want to know how these proposed policies could cost you?
Read our breakdown of three major property policies to understand what they could mean for you ahead of the NZ election.
Rental income and holding property costs
Recent analysis from Interest.co.nz highlights the gap between rental income and the wider costs of providing a rental property.
Rising mortgage interest, rates, insurance and maintenance costs can all reduce the amount investors are left with from their rental income.
This can put pressure on cash flow, particularly when rental income doesn't cover all the costs of holding the property. That could be one reason some investors are being more cautious about new borrowing.
Not sure what the current market means for your property investment portfolio?
Whether you're reviewing your rental income, considering another property or weighing up your next move, a Tella adviser can help you work through the numbers and understand your options.
This article is for informational purposes only. It does not consider your personal financial situation or objectives. Please consult with Tella mortgage and financial experts before making any decisions regarding your mortgage or debt strategy.
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