Investing in property post COVID-19


Low interest rates and a buoyant housing market have made property investment look like a very attractive option right now. Investing in property is bound to deliver a better return than putting your money in the bank, right? 

According to data from the Reserve Bank, investors made up 19% of new mortgages in June. And so it seems the Kiwi love affair with property has continued post-Covid.

However, the local economy is still far from stable, while the global outlook remains decidedly gloomy. As the coronavirus crisis deepens overseas, commentators are predicting a worldwide recession bigger than the global financial crisis. In this environment, credit will be increasingly hard to come by.

If you are a current or would-be property investor, there’s plenty to think about. Read on for our take on the main issues around investing in property post-Covid.


  • Keep a watch on property prices
    Nationwide, property prices have bounced back well, but it may be down to a post-Covid sugar rush. The latest data from the Real Estate Institute of New Zealand suggests that house prices have increased nationwide. And while that’s certainly the case for the main centres like Auckland and Wellington, there are still local variations.

    Tourist-dependent Queenstown and Rotorua, for example, have seen a drop in prices with holiday lets and Airbnb properties coming on to the market as international visitors dry up. It’s essential to do your homework and thoroughly research prices in your local area or even neighbourhood. Base your investment decisions on the situation locally rather than any national predictions about the market.
  • Supply and demand considerations
    High demand has been behind the sustained rise in house prices. But that may all be about to change. The imminent ending of the government’s wage subsidy scheme could see an increase in unemployment, or reduced hours and incomes for many. And in uncertain times, property owners and renters tend to stay put.

    More than 30,000 Kiwis have returned from overseas since the end of March. If NZ remains largely Covid-free, then it's likely this trend will continue. And it will have a significant impact on demand nationally with the main centres expected to be affected the most.

    Once again, there will be a variety of local factors at play. For example, there’s likely to be an over-supply of properties in tourist-dependent areas. And it’s a similar story in the student-dominated property market in Dunedin. Decreased numbers of international students plus the trend towards online learning has seen more local students staying at home.
  • Rule changes around rentals
    The latest data suggests the rental market is also bouncing back. However, once again there are wide variations regionally. In Queenstown-Lakes district for example, supply is up 90% on the same time last year with Airbnb and Book-a-bach properties ending up on the mainstream rental market.

    Nationwide demand is up on the same time last year, which could in part be fuelled by New Zealanders returning home from overseas. However, in areas where there’s an oversupply of properties, you could see rents dropping along with your investment returns.
  • Issues to think about 
    If you are still keen to go ahead with your property investment plans, then here are some of the issues you need to carefully consider.
    • How will I manage risk?
    • What will happen if I struggle to find tenants and the property stays empty?
    • What’s the plan if my tenants cannot pay the rent?
    • How will I cope if I sell the property, and the bank retains all the sales proceeds?
    • What happens if I come off an interest-only mortgage and the lender forces principal and interest because the property’s value has decreased?


There’s no doubt that property can still be an excellent investment, even if it's more complicated in the post COVID-19 market. Thorough research and careful planning is needed to make sure it's the right choice for you.

If you are thinking about investing in property, then contact one of our advisers for some expert help and advice.