Property Investment
4 min read
You might think property investment is just about numbers.
It’s not!
It’s a full-blown emotional rollercoaster.
One minute, you’re riding high on capital gains, the next you’re clutching your spreadsheets in panic as the market drops.
Over the past 20 years I’ve seen it all: booms, busts and everything in between. With each shift, my own emotions have jumped up and down.
That’s why in this article you’ll see the 4 key moments from the last 20 years and how I felt.
We’ll also unpack the emotional journey many investors would have experienced at each stage.
The Global Financial Crisis hit hard in 2008.
Property prices had surged the previous 5 years, but now investors saw their property values drop.
Many were rattled; some lost hundreds of thousands of dollars as their property values declined.
At this point, they were probably thinking: “I’ve made a huge mistake.”
My friend and colleague, Andrew Nicol, saw this happen. In 2007, he convinced his parents to invest with him in Kaiapoi at the top of the market. They bought a property off-the-plans for $390k.
By the time the property was built (and they paid for it) it was worth $25k less. You can imagine how awful Andrew felt at the time, especially since this was his parents’ first investment.
The news was filled with doom-and-gloom headlines, and the idea of property as a wealth-building tool seemed laughable.
At this point, investors may well have thought: “I’m never going to make money off this property.”
The early-2010s were marked by a frustrating flat period. Property prices were stagnant in many parts of the country.
People began to realise property wasn’t the surefire win they had expected. There was no sign of a boom, and some considered selling to cut their losses.
Let’s say you invested in Gisborne in 2007. You would have had almost 10 years in a flat market, up to 2016.
However, from 2016 to 2021, some suburbs surged by nearly 300%.
If you had sold your Gisborne property in 2015, you would have missed it entirely (and probably kicked yourself).
Then came 2016 – 2021. Everything changed.
Property prices boomed across most of the country (even before Covid-19 pushed interest rates down).
Auckland boomed first. Property prices kicked off from 2012 – 2016; then it was the rest of the country’s turn.
Prices rose rapidly and investors were back on top.
Then the Covid-19 pandemic arrived. It was a heady period of low interest rates and there was a mad rush that triggered one of the biggest property booms in history.
National house prices rose over 20% in a single year. In some places, like Auckland, it was even higher.
Everyone wanted in. FOMO (fear of missing out) took over, and new investors rushed to buy, convinced prices would keep climbing forever.
The emotional high was real, but history tells us that no market stays hot forever.
Fast-forward to now. Those same investors who couldn’t wait to get on the investment train with everyone else are feeling uncertain again.
From the peak in late 2021 to the bottom of the market, property prices dropped by around 18% nationally.
Auckland and Wellington saw even steeper falls – over 20%.
The media headlines have changed, and people are asking themselves: “Is the golden age of property investment over?”
Some buyers who jumped in during the boom wonder if they made the right call. Others quietly blame their advisors, saying, “Did Opes hype this up too much?”
But here’s the thing: this cycle repeats itself.
When prices drop, investors panic. When they rise, everyone thinks they’re brilliant. The truth? Markets move in cycles — and success goes to those who ride them out.
It frustrates me when people try to sell property investing using the national average:
“Look, the NZ property market goes up almost every year.”
You're not investing in the New Zealand property market, you're investing in Christchurch, or Wellington, or Invercargill. And each of those markets moves to its own beat.
Sometimes Auckland is down while Gisborne is booming. Other times it’s the reverse.
But that makes it seem like the national average is always going up, even though your individual property isn’t doing that.
You are going to go through more downturns and flat periods than the national average shows.
The biggest issue for investors is thinking everything is going to be great … but it’s not going to be all the time.
You'll be investing in specific cities and regions, and those markets have unique cycles.
Long-term, you might average 6-7% annual growth, but that means some years will be well above 7%, others well below.
And you’ll go through a few flat periods too. That’s the emotional rollercoaster you need to ride.
You’re not alone if you bought at the peak of the market. Plenty of investors bought in 2021 ... myself included.
I picked up two properties in Auckland that year. Would I have bought them if I’d known it was the peak? Probably not.
But I also have properties in Canterbury and the Bay of Plenty, purchased in different market cycles. Those have grown steadily, balancing out the picture.
I remind myself that I’m in this for the long game. Selling now would only lock in a paper loss and turn it into a real one.
Believe me, I get it. It’s tough seeing your property’s value dip. It’s tough trying to hold on to an investment when interest rates are through the roof.
I feel that too, but the most successful investors aren’t the ones who pick the perfect time to buy.
They’re the ones who stay in the game. The ones who understand the market moves in cycles, who hold their nerve when others panic.
Because if history is anything to go by, the next upswing might be closer than it feels.
Kathy Faulkner, Financial Adviser and property investor
Kathy Faulkner is a Financial Adviser providing 5-star review service to 100s of Kiwi investors. She is a property investor herself and has a diverse property portfolio throughout New Zealand. Her financial advice career started decades ago in South Africa and she knows what it is like to start from the beginning and build wealth through careful investments and hard work.
