Investors Return as Smaller Landlords Drive the Recovery of Property Market

New data from Cotality’s Buyer Classification Pulse indicates that mortgaged multiple property owners (MPOs) who own multiple properties are gradually returning to the market after two years of sluggish transactions.

This policy adjustment was introduced following a series of regulatory and financial reforms, which have improved the investment environment, including the shorter Brightline Test, reduced loan-to-value ratio (LVR) requirements from mid-2024, and the full restoration of mortgage interest deductions from April 2025.

Confidence among landlords is also improving. The latest Crockers Investor Insight survey with Tony Alexander found 20% of investors plan to buy within the next 12 months, up from 14% in April, while fewer intend to sell. Alexander said this marks “the best result since June,” showing a gradual lift in confidence.

Investors paying less than last year

Nationally, mortgaged MPOs paid a median of $759,000 for property so far in 2025 – slightly lower than $770,000 last year. That compares with a $700,000 median for first-home buyers (FHBs) and $880,000 for movers.

The slight decrease in prices does not mean that property options have become cheaper. In fact, investors' preference for detached houses has risen to 67% in 2025, compared to 66% in 2024. FHBs and movers remain more house-focused, with standalone dwellings accounting for 75% of their activity.

New builds remain key to investor strategy

Around 30% of all new-build purchases this year have come from mortgaged MPOs, only slightly below 2024’s 31%. That’s still well above the 25% share in 2020, before Labour’s property tax changes reduced investor incentives.

New builds continue to attract investors because they’re exempt from LVR and DTI restrictions, though they often come with higher upfront prices and fewer renovation opportunities.

However, Alexander pointed out that the majority of landlords still prefer to purchase existing properties, while their interest in newly built properties continues to decline.

Investor activity rising across the regions

Mortgaged MPOs now account for nearly 24% of national purchases, up from lows of around 22% between 2022 and 2024, Cotality data showed.

While first-home buyers remain dominant in Wellington, investor demand has strengthened elsewhere:

• Hamilton: up to 29% of purchases

• Christchurch: 27%

• Auckland: 26%

• Tauranga and Dunedin: both showing higher investor shares

Smaller regions are also recording notable lifts. In Gisborne, investor share jumped from 23% to 30%, Invercargill rose from 20% to 27%, while Rotorua (28%) and Hastings (25%) both exceed the national average.

The return of mum and dad investors

Cotality’s analysis shows that the resurgence in MPO activity is being driven by smaller-scale investors, often dubbed “mum and dad” landlords – those with two to three properties in total.

These buyers are not large investors but rather individuals who are leveraging their home ownership or small-scale investment portfolios to re-enter the market. Due to the reduction in borrowing costs and a more favorable regulatory environment, this group is quietly driving the early recovery process of the real estate market.

For mortgage advisors, this trend indicates an increase in investor confidence, and the relaxed loan conditions have also played a supporting role.