Property investors are stepping back - and why housing’s winter slowdown could now last until February

Thursday, 25 June 2026

New Cotality data shows New Zealand house sales fell 8.3% in May compared to the same month last year, marking the fifth consecutive monthly decline.

Investors with larger portfolios of three to four properties are leading the retreat, with Auckland and Christchurch experiencing the sharp seeable drop-offs.

First-home buyers slightly increased their market share to 27.7%, split between those nervous about global uncertainty and those rushing to lock in mortgage rates before they rise further.

House sales are falling, fewer buyers are coming through and investors are taking up less space in that smaller pool.

New Cotality data shows the number of homes sold across New Zealand in May was down 8.3% compared with the same month last year, marking the fifth monthly drop in a row.

Across the first five months of the year, there were 1,775 fewer house sales than in 2025.

Kelvin Davidson, chief property economist at Cotality, said sales had been weaker than expected.

“Overall sales across the market are down sort of five or 6% across the first part of the year, compared to the same time last year, and that’s down from a relatively normal level too.”

Investors pull back

Within that smaller group of buyers, investors are stepping back from buying more homes.

People who already own more than one property made up about 22% of sales in April and May, but their share of the market dropped 5.7% over the first five months of the year.

“So the pool has got smaller, and not only that, the share of that pool going to mortgaged multiple property owners has got a little bit smaller. So, yeah, there are, by whichever way you look at it, fewer investors buying at the moment,” Davidson said.

The biggest slowdown appears to be among investors with slightly larger portfolios.

“You've still got new investors getting in who own two properties, but maybe those people who have slightly bigger portfolios of 3 to 4 properties… that group has pulled back a bit now,” Davidson said.

Among the main centres, Auckland and Christchurch have seen the biggest investor drop offs.

Rodney King, broker at Loan Market Agile, said the slowdown was also showing up in how many people were preparing to buy. He’s noticed people with pre-approved bank finance lined up and ready to go are dropping.

“My sense is it’s probably down 10 to 15%… investors have been cautious for quite some time, but even more so now, with the interest rate cycle turning and rates looking to go up,” he said.

“Our settlement numbers of new mortgages each month has been consistent each month since February, but our pipeline of clients actively looking in the market has been getting less and less…the mortgage settlements for June would be mostly people that emotionally committed to buying a house potentially four months ago, or even longer in some cases.”

King said the lower number of sales could become a “new normal” for a while and the usual spring lift may arrive later.

“With the election being in November, we’re likely to see that bounce back in buying perhaps being delayed, and then after the election it’s basically Christmas, then January is a write off - it could be fairly subdued right through until February before we see the usual post election pickup.”

First home buyers still strong

First home buyers are still taking a bigger share of the purchases.

They made up 27.7% of sales in the first five months of this year, up from 25.8% over the same period last year. It makes them still the single biggest group of buyers.

“There’s two quite contrasting comments that we’re getting from first home buyers at the moment,” King said.

“We’ve got one group that are interested in how much they can borrow, but nervous to buy because of uncertainty in the world… and then we’ve got another group that say, ‘I know that if I wait six months the interest rate I’m going to pay on the mortgage is likely to be half to three quarters of a percent higher, so we want to get in and buy with urgency now and lock in our mortgage rate for, say, three years.’”

People already on the ladder who would usually be moving into their next home made up 11% fewer sales over the first five months of the year, compared to that time in 2025.

Investor “waiting and seeing”

One investor who owns four properties across Auckland, Whangārei and Lower Hutt told Stuff they were not planning to buy more properties for a “long time.”

The 32 year old who lives and works in Australia, bought their first home in Auckland’s Hobsonville in 2017 and now rents it out. They later bought in Whangārei and added two units in Lower Hutt.

“We aren’t selling but aren’t buying either. It’s sort of wait and see for us. There's not an end of days thing or anything. But there’s just a lot going on in the world what with with Iran thing and interest rates, rising costs and everything.”

They said many investors they knew had been caught out in recent years.

“A lot of people got caught out after that Covid downturn… I think those people have been burnt, and they are the mum and dad investors that wanted to invest in a couple of properties, but hadn’t done their financials properly, they just kind of go with, ‘oh, you know, like you're going to get capital gains…’ Well, that’s not really happening at the moment so it’s not worth the risk really.”

A recent survey of 200 mum and dad landlords by independent economist Tony Alexander found a record 38% planned to sell while only 12% intended to buy.

Returns from renting out a home remain under 4% nationally, according to the latest Cotality data.

And house prices fell 0.3% in the three months to May.

Email Stuff’s chief property correspondent Janika ter Ellen with your story: janika.terellen@stuffdigital.co.nz