Investors Are Quietly Re-Entering the Market—Here’s Why You Don’t Want to Miss the Next Wave

Staircase Financial
6 days ago
2 min read

a man and woman standing outside a new townhouse in new zealand — "Mum-and-dad" investors are back and they are moving fast

After a two-year hiatus, “mum-and-dad” investors are back—and they’re moving fast. Falling mortgage rates, relaxed LVR rules and the reinstatement of full interest deductibility are reigniting demand. Investors’ market share has already climbed back to pre-downturn levels, and historical data show that early-cycle buyers reap the strongest capital gains.

Investor market share is rising again

Mortgaged multiple-property investors captured 23 % of all purchases in Q1 2025, up from roughly 20% at the 2023 trough.
CoreLogic notes the resurgence is being driven by small-scale owners adding their second-to-fourth properties—classic early-cycle behaviour.

Cheaper debt has slashed weekly mortgage “top-ups”

Average fixed mortgage rates have fallen from above 7% in 2023 to sub-5% offers in 2025, cutting typical cashflow shortfalls almost in half—from ~$400 to ~$200 per week on a standard rental.
The Reserve Bank’s latest OCR cut to 3.25% (May 2025) signals further relief ahead.

Credit conditions now favour investors

LVR rules mean most investors need only a 30% deposit, not the 35–40% required at the peak of macro-prudential tightening.
Banks are actively courting low-risk, equity-rich investors—as reflected in headline fixed rates below 5%.
Full mortgage-interest deductibility was restored on 1 April 2025, further boosting after-tax returns.

Limited new stock + rising investor appetite

Combine a shrinking construction pipeline with a growing pool of cashed-up investors and you have the recipe for competitive bidding in 2026-27. Early entrants gain:

Capital uplift as buyer competition intensifies.
Rental growth fuelled by constrained supply.
Tax-efficient gearing while debt is cheap.

History shows that investors who enter during the “quiet accumulation” phase of the cycle outperform those who chase momentum later. The window is open now—but it will not stay open for long.