Con #2 – Interest rates are heading up again
The OCR is now 2.75%. And the Reserve Bank says it may need to increase further.
That matters because when the OCR goes up, mortgage interest rates can go up too.
For property investors it can affect you in two ways.
For starters, your mortgage gets more expensive.
Say your rental income stays the same, but your mortgage costs an extra $100 a week. That’s another $5,200 a year you need to find.
But higher interest rates can also affect house prices.
That’s because buyers generally can’t borrow as much when interest rates are higher. If buyers have less money to spend, that can take some of the heat out of house prices.
How much this affects you depends on how much you’ve borrowed.
If you’ve got a small mortgage another increase might not change much.
But if you’ve borrowed a lot … it matters a lot.
Con #3 – Property investors’ costs have risen
Buying the property is one thing. You also have to afford to keep it.
Council rates have risen sharply. The median rates bill across New Zealand increased 14.2% in 2024/25, followed by another 9.2% increase in 2025/26.
Put those increases together and that’s roughly a 25% increase in just two years. That’s before you factor in insurance, maintenance and mortgage costs.
The Government has proposed limiting annual rate increases to 2 – 4%. But the legislation has only passed its first reading, and the caps aren’t proposed to fully take effect until July 2029.
