Is an investment property still worth considering?

The investment property market in 2026 is more focused on fundamentals than speculation.

With property values broadly flat to slightly lower and mortgage rates moving higher again, investors can no longer rely on quick capital gains to make an underperforming property appear attractive. Rental income, tax treatment, maintenance, insurance, vacancy risk and long-term growth prospects all need to be assessed carefully.

The restoration of full mortgage interest deductibility has improved the position for many residential rental investors. For the 2025/26 tax year onwards, interest relating to residential rental property can generally be claimed in full, provided the borrowing meets the normal deductibility rules.

However, tax deductibility does not turn a poor investment into a good one. Investors still need to consider the actual cash flow and whether the property remains manageable if rates rise, rent growth is limited or an unexpected repair is required.

Questions to consider before purchasing

• Does the expected rent support the mortgage, rates, insurance, maintenance and property management costs?

• What happens to the cash flow if the property is vacant for several weeks?

• Is the property likely to appeal to quality tenants over the long term?

• Are there significant upcoming repairs or compliance costs?

• Does the investment fit with your existing mortgage, KiwiSaver and retirement strategy?

• Have you allowed for a conservative level of capital growth rather than relying on a rapid price increase?

  
  

The current market may provide investors with more choice and negotiating power, but the property still needs to work on its own merits. We can help you assess your borrowing capacity, model potential cash flow, review different ownership and lending structures. Get in touch with one of our advisers to discuss whether property fits your wider financial plan.