New research from Infometrics, commissioned by the New Zealand Property Investors Federation (NZPIF), has quantified the substantial economic footprint of private residential property investors in New Zealand. The study reveals that these investors generated an estimated $24.8 billion in gross domestic product (GDP) contributions over the year to the end of 2025, equivalent to 5.9% of the nation's total economy. This figure encompasses direct spending, indirect supply chain effects, and induced economic activity from worker earnings, highlighting a sector often misunderstood as purely speculative.
The report arrives amid ongoing debates about housing affordability, rental supply, and investor roles in the market. By leveraging updated input-output tables from Stats NZ, it provides evidence-based insights into how rental property ownership sustains jobs, industries, and communities across the country. As New Zealand grapples with housing shortages and economic recovery post-global challenges, understanding this dynamic becomes crucial for informed policymaking.
Challenging Perceptions: From Speculation to Economic Pillar
Residential property investors have long faced criticism for driving up house prices and prioritizing profits over social good. Terms like 'speculators' and 'unproductive landlords' have dominated discourse, influencing policies such as interest deductibility restrictions and extended bright-line tests. However, the Infometrics analysis shifts the narrative by demonstrating tangible value creation.
NZPIF Advocacy Manager Matt Ball emphasized in a recent interview that without data, misconceptions lead to flawed regulations harming the broader economy. 'The absence of quantified evidence has damaged the sector, resulting in poor policy outcomes,' he noted. Rental housing, provided by investors, underpins workforce mobility—enabling workers, students, and families to live near jobs and education without immediate home ownership barriers.
Methodology: Robust Input-Output Modeling
The study's methodology relies on Stats NZ's 2020 input-output tables, updated to 2024, to capture inter-industry linkages. Infometrics modeled three impact layers:
- Direct effects: Investor expenditures on property purchases, maintenance, renovations, insurance, rates, and professional services like accountants and lawyers.
- Indirect effects: Upstream spending supporting suppliers, such as builders, plumbers, and material providers.
- Induced effects: Re-spending of wages earned by those directly and indirectly employed, rippling through retail, hospitality, and other sectors.
This multiplier approach estimates how initial investor outlays amplify across the economy. Data sources include property transaction records, rental surveys, and industry benchmarks, ensuring a comprehensive view of approximately 300,000 investor-owned rental properties nationwide.
Direct Contributions: $4.1 Billion in Maintenance and Beyond
Investors directly injected billions into the economy through operational costs. Key spending categories include:
| Category | Annual Spend ($b) |
|---|---|
| Maintenance & Improvements | 4.1 |
| New Builds & Purchases | ~11 (partial) |
| Rates, Insurance, Fees | Varied |
Maintenance alone—repairs, renovations, and upgrades—totaled $4.1 billion, sustaining tradespeople and suppliers year-round. New construction linked to investors added further momentum, with flow-on to manufacturing and transport. These activities not only preserve housing stock but enhance energy efficiency and livability, benefiting tenants long-term.
For context, this spending rivals major sectors, underscoring investors' role in demand for construction amid supply constraints.
Total Economic Footprint: 126,000 Jobs and 5.9% of GDP
Aggregating all effects, the sector supported 126,000 full-time equivalent (FTE) jobs—5% of New Zealand's workforce. This spans construction (largest share), professional services, retail from worker spending, and more.
GDP impact broke down as substantial direct value from rents and operations, amplified by multipliers. Infometrics' Brad Olsen highlighted support for 109 industries, stating, 'It's not just immediate impact; it's where the money flows next.' In a nation of 2.5 million workers, this scale rivals agriculture or tourism pre-COVID.
Photo by Athithan Vignakaran on Unsplash
- Construction: Core beneficiary, with investor-driven demand stabilizing employment.
- Professional services: Accountants, valuers, lawyers handling compliance.
- Consumer spending: Workers' earnings boost local economies.
Regional Ripples: Nationwide Benefits
While national figures dominate, effects permeate regions. Auckland, with high investor density, sees amplified construction; provincial areas benefit from maintenance sustaining local trades. The model assumes proportional distribution based on property ownership patterns, aiding rural economies where rentals support seasonal workers and migrants.
In smaller centers, investors fund community stability—renovating older stock and enabling young families or retirees to stay local. This decentralization counters urban concentration, fostering balanced growth.
Fiscal Contributions: Taxes and Public Revenue
Beyond GDP, investors remit significant taxes. Rental income tax, GST on services (maintenance, fees), and property rates flow to councils and IRD. While exact report figures are aggregate, sector-wide estimates place income tax and GST in billions annually. For instance, GST-registered investors (over $60k turnover) remit 15% on qualifying expenses, supporting infrastructure.
Rates payments—often passed to tenants indirectly—fund local services. Bright-line test gains tax short-term flips, balancing speculation deterrence with long-term holding incentives. Recent policy reversals enhance viability, potentially boosting compliance and revenue.Opes Partners outlines restored deductibility boosting net contributions.
Criticisms and Counterarguments: A Balanced Debate
Not all agree. Council of Trade Unions' Craig Renney questions if maintenance would occur under owner-occupancy, potentially double-counting. Economist Shamubeel Eaqub notes capital diversion from productive sectors may distort markets, exacerbating affordability.
NZPIF counters: Rentals fill a unique niche—20-30% of households rent, enabling mobility. Owner-occupiers spend differently; investors specialize in supply. Olsen affirms minimal displacement in ongoing flows. The report sparks dialogue, urging nuanced policy over blanket measures.Full report details address these points.
Policy Landscape: Tailwinds for Investors
2024-2026 reforms favor stability: full interest deductibility restoration (phased from 2023 restrictions), bright-line test shortened to 2 years (from 10). These reduce tax burdens, encouraging supply via new builds and retention.
Government's housing accelerator—easing consents—aligns with investor capacity. Amid 2026 interest rates stabilizing ~5-6%, viability improves, potentially adding supply amid migration-driven demand.
Housing Supply and Social Benefits
Investors bridge shortages: ~1.2 million rentals house 1 million Kiwis. Professional management ensures standards, turnover funds upgrades. Case: Post-cyclone rebuilds saw investors repurpose homes swiftly.
Photo by Karissa Best on Unsplash
- Student housing: Near unis, stabilizing enrollment.
- Workforce mobility: Rentals near jobs reduce commutes.
- Affordability: Competition moderates rents long-term.
Future Outlook: Sustainable Growth Ahead
With favorable policies, sector growth could hit $30b+ GDP by 2030, if supply matches demand. Challenges: rates rises, regulations. Solutions: tech (proptech), green retrofits for efficiency.
Stakeholders urge collaboration: investors + government for 100k new homes/year. Balanced approach—tax equity, incentives—maximizes benefits.
This landmark study reframes property investment as economic bedrock. Policymakers must weigh contributions against challenges for holistic housing strategy. Explore the full Infometrics report for deeper data.
