Rethinking Our Relationship with Property: Thoughts on the NZ House Price Downturn

For years, the average Kiwi couple has done everything “right.” They’ve both worked full time, lived modestly, skipped big holidays, and quietly chipped away at their savings. Every spare dollar has gone into a house deposit fund. They gave it all just to get on what we used to call the “Property Ladder”. After nearly a decade of sacrifice, many have managed to save more than $100,000—an amount that once would have opened the door to home ownership.

But just as they neared the finish line, prices surged again. That modest first home jumped another $50,000 in a matter of weeks. Their hard-earned savings no longer felt like enough. The dream moved further away.

This is the reality for many New Zealanders stuck on what sometimes feels more like a property stairmaster than a ladder—constantly climbing, only to stay in place.

For decades, we were told that buying a home was the safest path to wealth. Our parents did it. Our teachers told us to do it. The saying was almost sacred: “House prices never go down.”

But New Zealand’s recent housing correction—real price drops of around 25% since 2021 (once you account for the high levels of inflation during this period)—has shaken that belief to its core. It caught many by surprise and exposed the uncomfortable truth: housing is NOT a guaranteed win.

However, there is a plus side to the nasty wake up call that we all received in Aotearoa! House prices can do down. The price of anything can do down! And because of that, we should always be asking ourselves: what price is a "good price" for all and every asset we decide to add to our portfolio (property included).

This is the silver lining: the correction has sparked a powerful shift in thinking. It's also paved the way for some opportunities to buy property now at much cheaper prices, but more on that later...

More and more Kiwis are now exploring other investment vehicles—diversified, productive options like bonds, shares, managed funds, and commercial property trusts. These investments don’t just offer returns; they support real businesses, help raise capital, and create jobs. They contribute to a thriving, productive economy.

And unlike residential home property, these alternatives are often more accessible to the average kiwi. They require lower upfront levels of investment, they’re easier to diversify, and they offer flexibility that’s crucial in uncertain times. Rather than tying all your money into one overhyped, illiquid asset, you're spreading your risk and growing your wealth in smarter ways.

It’s time to rethink what financial success looks like.

Home ownership might still be part of your journey—but it doesn’t need to be the whole story. The next generation of wealth builders won’t just rely on one asset class. They’ll build diverse portfolios, seek more value and higher yields, and invest in the broader economy. They will buy property, but also have significant investments in other great asset classes like fixed interest and shares and that will help them navigate any economic situation.

The average Kiwi couple has outgrown the outdated roadmap. They've realised that there is more to financial success than just owning their own house!

By stepping off the Property Stairmaster and embracing new opportunities, we're claiming control over our financial futures.

And that’s not just good news—it’s a better way forward.

Talk to us if you want to learn more!