A significant shift in sentiment among ‘mum and dad’ investors is leading to a record number planning to sell their properties in New Zealand. This trend indicates a potential reset for the housing market, driven by rising mortgage rates and economic uncertainty.
Before this shift, many investors expected steady capital gains from property investment. However, recent data shows that 38% of these investors now plan to sell. The change comes as two-year fixed mortgage rates rose sharply from 3.46% in April 2021 to 7.60% in October 2023.
The immediate effects are evident. Sellers reduced their asking price by an average of $33,212 in the first quarter of 2026. Nationally, 4.9 percent of all listings were reduced during this time. In some regions, the reductions were even steeper; Coromandel recorded an average drop of $72,049, while Wellington saw a decrease of $51,841.
Key statistics on price reductions:
- Sellers reduced asking prices by an average of $33,212
- Coromandel had the largest drop at $72,049
- Wellington’s average reduction was $51,841
- 4.9% of listings were reduced nationally
- Manawatu/Whanganui had the highest proportion at 12%
Experts highlight that this shift reflects changing expectations among smaller investors. Michael Rehm stated, “For many smaller investors, it appears the model that once relied on steady capital gains is becoming harder to sustain.” Meanwhile, Kelvin Davidson noted that “the housing market broadly remains in a holding pattern.”
This uncertainty raises questions about housing affordability and its impact on first-home buyers. The national median property value was $809,101 in April 2026—16.8 percent below its peak in January 2022.
The impact of rising interest rates on the housing market remains unclear. Conditions vary significantly across the country, as Vanessa Williams pointed out: “What this shows is that conditions can vary significantly across the country.”
