Is now a good time to purchase an investment property?

Investment property can be a fabulous way set yourself up for retirement and with declining interest rates, stable house prices, lower competition, the return of 100% interest deductibility from next year, now could be a good time to take the plunge.

Interest Rates on the Decline

One of the most significant factors impacting the property market is interest rates. As the Reserve Bank of New Zealand continues to cut the OCR, lenders are following suit and reducing interest rates (much faster than anticipated), making the cost of borrowing more affordable. You can now likely borrow more than you could last week, making it easier for potential investors to secure a mortgage and enter the market.

House Prices Holding Steady (for now!)

House prices in New Zealand have remained relatively stable over the past 12 months. While there have been some regional variations, the overall trend has been one of resilience. This suggests there are opportunities for investors to purchase properties at a reasonable price before prices start to rise again; ASB is forecasting a 12.2% house price rise from March 2025 to 2026.

The return of 100% Interest Deductibility

From 1 April 2025 interest deductibility will be fully restored, and you will be able to claim 100% of the interest incurred. By deducting the interest paid on your rental property loans, you can potentially reduce your taxable income, leading to lower tax liability and increased cash flow. In other words, making the advantages of owning an investment property more desirable.

Ultimately, the decision of whether to invest in property is a personal one that should be based on your individual circumstances and financial goals. If this is something you are interested in exploring, we’re here to help and provide personalised advice to help you make an informed decision. Do get in touch, we’d love to assist.