Why Banks Are Easing Lending, Park-Free Townhouse Traps & The Flat Market Myth | Week in Review

In this episode of the Week in Review, Debbie Roberts, owner and financial adviser at Property Apprentice, cuts through the noise of policy shifts and headlines to unpack the latest real estate data. 

Despite quiet buyer demand, banks are quietly loosening lending criteria, with a net 36% of advisers reporting bank willingness to advance funds—up from just 2% two months ago. Meanwhile, high-density "park-free" townhouses are creating real-world friction, leading to street parking issues, a $100,000 garage sale in Wellington, and tradies charging up to a 30% premium to access parking-nightmare streets. 

Debbie also breaks down the REINZ June figures to show why the national housing market is holding flat rather than collapsing, examines RBNZ Assistant Governor Karen Silk’s comments on housing wealth channels, and exposes the 6-year vacancy scandal surrounding Kāinga Ora state housing in Strathmore Park. 

Topics Covered in This Episode:

• Banks Easing Criteria vs. Buyer Hesitation: Why banks are opening their doors while buyers stay home, and how experienced investors can take advantage of the pre-approval conversion gap. 
• The Park-Free Townhouse Reality: How government deregulation of parking rules in 2021 is backfiring with street parking chaos, tradie access premiums, and developer catch-22s. 
• REINZ June Data & Regional Splits: Why national median prices held steady at $770,000 (+0.7% YoY) and how Canterbury (+4.1% YoY) is outperforming Wellington (-4.5% YoY). 
• RBNZ OCR Hike & Falling Wholesale Swap Rates: Why retail banks face no commercial pressure to raise long-term fixed rates despite the OCR moving to 2.5%. 
• Wellington Ghost Houses: Kāinga Ora’s bureaucratic gridlock in Strathmore Park leaving prime land vacant for up to six years while over 800 people sit on social housing waitlists. 

Transcript

Intro
Is the noise of policy shifts, rising consents, and global economic friction just blinding people to the massive opportunities sitting right in front of them? Hi, everyone. I'm Debbie Roberts, owner and financial adviser at Property Apprentice.

For this week in review, we're breaking down why banks are quietly easing up on lending even as demand remains relatively quiet, the harsh real-world realities of buying a park-free high-density townhouse, and why the housing market's actually flat, not crashing. Plus, we explore RBNZ's Assistant Governor's Karen Silk's comments on why our long-standing reliance on housing for wealth could be fundamentally changing. And we pull back the curtain on some shocking public housing gridlock in Wellington. We've got a lot of information to cover today, so let's get into it.

Topic 1: Investors Pull Back Further as First-Home Buyers Hang On
Topic number one from New Zealand Financial Advisor on the 15th of July: investors pull back further as first-home buyers hang on.

Mortgage advisers are reporting persistently quiet demand for finance, reflecting subdued conditions in the residential real estate market, though there are early signs of stabilization. This subdued mood tracks with official REINZ data showing national sales fell 11% in June compared to May and were down 2.9% year-on-year to 5,996 sales. The national median price held broadly steady at $770,000, tracking up a minor 0.7% year-on-year.

First-time buyer inquiries recovered slightly after dropping post-US and Iran conflict, but remained below pre-conflict levels with a net 12% of advisers reporting fewer first-time buyers looking for advice. The investor segment continues to lag with a net 29% of advisers reporting fewer inquiries, an improvement on the net 48% negative readings seen in April and May. Weakness in this sector is expected to continue for some time due to ongoing monetary tightening and unresolved geopolitical tensions in Iran.

Active investors are shifting away from short-term speculation for capital gains, focusing instead on strong equity and long-term wealth plans—which is basically the whole point of long-term property investing. Lender caution has eased over the past two months with a net 36% of advisers reporting banks are more willing to advance funds, up from 29% last month and just 2% two months ago. The two-year fixed term remains the absolute favorite among borrowers chosen by 72%, though the three-year fixed term ticked up to 14%.

Advisers note a conversion gap: there are a lot of bank pre-approvals being done, but fewer transactions are happening, failing to convert them into closed property settlements.

Debbie's Thoughts: Were you surprised to hear that banks are opening their doors while buyers stay home? I find this fascinating, and it happens every property downturn. Lender caution has reduced beautifully from a flat 2% two months ago to a net 36% of advisers reporting bank willingness to lend. The doors are open, even if buyers are still hesitating.

And look who's actually active in the market right now: the investors active in July are experienced, long-term strategists with strong equity and a clear multi-generational plan. They're not trying to time a fast boom. They're quietly securing high-quality assets while prices are flat and vendor leverage is high.

The pre-approval conversion gap is a golden opportunity. If you've got the equity, this is your counter-cyclical sweet spot. Go negotiate a great deal while everyone else is frozen by OCR increases and global conflict anxiety. Most borrowers are currently locking in two-year rates to hedge their bets. Is that the best choice? Well, that depends on your situation, so talk to your mortgage adviser if you're looking at fixing interest rates.

Topic 2: Would You Buy a Home With No Parking for a Better Location?
Topic number two from Stuff on the 16th of July: Property poll – Would you buy a home with no parking if it meant a better location?

High-density urban intensification is now a permanent fixture of New Zealand's housing landscape, forcing buyers to weigh unique choices and structural challenges. The chief challenge among these modern developments is the growing necessity for buyers to do without a dedicated private car park. Since the government ended mandatory minimum parking requirements for intensification projects in 2021, more and more new build complexes have completely removed on-site parking from their blueprints.

Advocates argue that park-free developments encourage walking, cycling, and public transport use, thereby reducing congestion and emissions over time. Only one problem with that: you can't force people to do something that they don't want to do.

Buying off-plan townhouses saves buyers tens of thousands of dollars compared to standalone homes, allows for higher density dwellings in desirable locations, and frees up space for green areas and playgrounds. In practice, park-free developments rarely equate to car-free occupants. Many buyers keep their vehicles anyway and park them on what are already cramped streets, causing severe friction with existing residents in many situations.

A Wellington Reddit post highlighted the hell of relying on street parking in blue-chip suburbs like Kelburn, noting that local councils can change road layouts or add cycleways at any time, erasing whatever parking is left overnight. Private parking is so highly prized in Wellington that a standalone garage on Bowen Street sold for $100,000 in 2024.

The lack of parking is driving up property maintenance costs as well, with Wellington tradies charging up to a 30% premium to service homes with no off-street parking. Because if they've got to park their work car or work vehicle, where are they going to park while they're doing your job? Some tradies are even blacklisting parking nightmare streets entirely, which means your chance of getting a tradie to come in and fix something could be slim to none.

Debbie's Thoughts: On paper, park-free townhouses sound like a great idea for progressive urban design: you buy off-plan, save tens of thousands of dollars, swap out ugly asphalt for shared gardens, and stroll to your local café. Looks like an effortless win-win for both your mortgage and your carbon footprint.

But the real-world disconnect is that dropping a park doesn't magically dissolve a Kiwi's desire to own a vehicle. What if you've got to travel to work? What if you've got family that live out of town? What if public transport isn't readily available in your area? Instead, buyers move in, hold onto their cars anyway, dump them straight into surrounding streets, and the result can be absolute chaos—street parking warfare between frustrated new buyers and defensive existing residents.

Wellingtonians on Reddit laid it bare: it's absolute hell out there, and residents are routinely parking blocks away from their front doors. And don't expect those public parks to stay there forever; the council can paint a brand-new cycleway over your favorite spot at a moment's notice. When a single standalone garage on Bowen Street commands a $100,000 price tag just to get a car off the tarmac, you know the local infrastructure is completely maxed out.

The hidden tax on maintenance is what also blows me away. Tradies are getting completely fed up with driving around looking for a park or hauling heavy gear up steep hills. Plumbers and sparkies are now slapping up to a 30% access premium onto invoices for homes on parking nightmare streets, and some are blacklisting certain blocks entirely.

Don't let an emotional connection to a sleek showroom rendering override the real-world operational friction of buying a property with zero dedicated title access. When you see the results of the online survey with approximately 88% saying, "No way, I need my car," I wonder how many of these new townhouses are going to sit on the market for longer than normal, creating an oversupply with developers in a catch-22: can't sell it, can't afford to keep it empty either.

Perhaps there's a bit of a lesson there. If you build something that most people don't seem to want, how easy is it going to be to sell for a profit or even rent out? What will future capital growth look like without demand from buyers? Let me know your thoughts in the comments.

Topic 3: Housing Market Settled Except in Our Two Biggest Cities
Topic number three from RNZ on the 15th of July: housing market settled except in our two biggest cities.

The national median sale price in June was $770,000, up 0.7% year-on-year, but down 1.3% month-on-month. There were 5,996 properties sold nationwide, which is down 2.9% year-on-year and 11% month-on-month, while the house price index slipped 0.8%. REINZ CEO Lizzy Ryley confirmed the market is steady and balanced, tracking at 23rd for sales activity out of the last 35 June months since 1992, despite media claims that values are trending south at a rate of knots.

A major regional split is active: the South Island remains stronger with Canterbury up 4.1% year-on-year, while Wellington is really struggling, down 4.5% year-on-year and almost 30% below its peak. Auckland is soft but holding up better than Wellington, with its house price index down 3% year-on-year and monthly turnover sliding 13.3% as buyers adopt a wait-and-see approach ahead of the election. Auckland and Wellington have clocked 29 consecutive months of year-on-year inventory growth, giving buyers massive choice.

Infometrics reports that seasonally adjusted sales fell 1.7% in June, marking the first time since 2022 that sale numbers have fallen for four consecutive months due to the ongoing economic drag of the Iran war, budget pressures, and high fixed mortgage rates. I'd argue that last point—high fixed mortgage rates? You've got to be joking; they're still below the long-term average, even though they are on the increase.

Debbie's Thoughts: Mainstream headlines love drama, but the word of the day isn't collapse—it's just flat. We've got a flat housing market. Nationally, prices held virtually flat over the first six months of this year, completely defying the doom and gloom forecasts the banks were parading around. This is actually a relatively normal, settled market, where economic forces are balancing things out after a wild ride.

The regional split is quite stark, though: Christchurch is up 4.1% over the year, while Wellington's doing it rough, sitting nearly 30% below its previous peak. Auckland's not hurting quite as badly, but its 13.3% monthly turnover drop tells you exactly what buyers and sellers are doing: not much.

With the election looming, the entire country seems to have pressed pause to see where the policy goalposts land, which is nuts. Politicians are in for a season, so even if we do get a change of government, it's not going to be forever. Don't panic about things that you've got no control over; just make decisions based on the facts that are in front of you now.

Auckland and Wellington have now clocked 29 consecutive months of year-on-year inventory growth. There's a literal mountain of choice out there with close to zero competition from other buyers. This idea that Kiwis are suddenly going to abandon property as a wealth-building tool is, in my opinion, ridiculous.

The crowd is literally just sitting there waiting for a green light, but by the time the election's over and interest rates drop again, buyers are going to come back into the market and the best deals will already be gone. So are you going to follow the crowd, or are you going to be one of the smart few who take advantage of current market conditions before the next boom?


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Topic 4: Reliance on Housing as Sole Source of Wealth is Changing
Topic number four for this week in review from interest.co.nz on the 14th of July: reliance on housing being the sole source of wealth is changing and will continue to change, according to Reserve Bank Assistant Governor Karen Silk. We shall see, Karen. We shall see.


The RBNZ raised the OCR by 25 basis points to 2.5% to restore price stability, pushing up short-term floating and saving rates. Longer-term wholesale swap rates actually decreased, meaning retail banks face no commercial pressure to raise long-term fixed mortgage rates at the moment.


Karen Silk noted that Kiwis historically treat housing as a substitute wealth channel, which cyclically exaggerates interest rate impacts on the wider economy. The historical disconnect between housing demand and chronic undersupply is finally starting to close due to improved building conditions and increased supply.


BNZ's Stephen Toplis and Silk emphasize that while interest rate hikes hurt, inflation is the true evil that actively destroys consumer purchasing power and economic demand. So increasing the official cash rate to fight inflation is the lesser of two evils.


Debbie's Thoughts: Karen Silk's call that people will move away from housing as a wealth channel is a nice economic theory, but in my opinion, Kiwis love brick-and-mortar because it's tangible, you can leverage off it, and it works over the long term.

However, she's spot on about a major structural shift: the era of lazy capital gains from chronic undersupply is officially over. Why? Because as a nation, we're finally starting to realize that in order to make housing more affordable, we need to increase supply. This is a good thing. Slow and steady capital growth is far more preferable than massive booms and busts.

As for rates, BNZ's Stephen Toplis is also absolutely right: hikes are the lesser of two evils. We obsess over daily mortgage headlines while completely ignoring inflation, which is the silent thief that actually destroys purchasing power. Crushing inflation is the only way to get back price stability so wages can finally keep pace.

The real golden nugget here: long-term wholesale swap rates actually fell, meaning banks have zero excuse to hike longer-term fixed rates right now, so watch this space. While the crowd is paralyzed by interest rate anxiety, the smart counter-cyclical play is to block out the noise and secure high-quality assets with long-term capacity for capital growth.


Topic 5: Residents Want Answers Over Wellington Ghost Houses
Topic number five from 1News on the 16th of July: post-apocalypse – residents want answers over Wellington ghost houses.

Strathmore Park residents are demanding answers over two state housing blocks on Nuku and Ngatiapa Streets that have been vacant for years, turning lively suburban streets into derelict post-apocalypse eyesores. Planned Kāinga Ora developments of 39 homes on Nuku Street and 49 homes on Ngatiapa Street were axed last year following a government-mandated financial reset.

An Official Information Act (OIA) release exposed that some of these housing units have sat entirely empty and boarded up for six years, despite Kāinga Ora claiming tenants moved out gradually leading up to 2024. This neglect occurs while Wellington's social housing and transfer waitlist stands at 804 people, and 187 Rongotai electorate homes have been put on hold since December 2023.

The abandoned blocks sit on prime high-value land, boasting excellent all-day sun and sea views over the airport. Kāinga Ora declined to interview, but confirmed that they will be demolishing the Ngatiapa block soon, while the Nuku Street flats are in a first right of refusal process to sell to Taranaki Whānui. Though a preferred option is selected for the Ngatiapa site, the agency refuses to share details, stating it's important not to rush the process.


Debbie's Thoughts: What's happening on Ngatiapa and Nuku Streets in Strathmore Park is a textbook example of bureaucratic inertia. This is premium Wellington land with all-day sun and stunning sea views over the airport—the exact kind of asset private, agile developers would have transformed into vibrant family homes years ago. Instead, Kāinga Ora has let it rot into a dystopian, boarded-up eyesore. 

The real kicker is the timeline: while they claimed a gradual relocation of tenants, the OIA revealed that some of these units have sat empty for six long years. It's a tragic waste of capital when we've got over 800 people on Wellington's social housing waitlist.

Underutilization of government-owned property is simply poor use of taxpayers' money. It's good to see that something will finally be done, but unfortunately for many, it will always be a case of too little, too late.

Is this another reason why we need more private property investors in New Zealand, not less? I'd say absolutely it is. You wouldn't see many private investors leaving a property vacant for six years, would you?

Outro
I want to hear from you in the comments: with the housing market splitting so heavily, banks starting to ease up on lending criteria, and interest rates remaining favorable, are you looking south to Canterbury, targeting the massive price corrections in Auckland and Wellington, or are you brave enough to buy a park-free townhouse? Let me know your thoughts below.

If you enjoyed this podcast and it gave you a bit of clarity to help you navigate your mortgage and property plans this week, please hit that subscribe button, give this video a like, and tell your friends about it.

And if you want to discover how to build a highly resilient, cash-flowing property portfolio that can comfortably withstand any interest rate cycle without the guesswork, join me at one of our next free online events called How to Succeed with Property Investing. Go to www.propertyapprentice.co.nz and secure your spot right now. Thanks for listening. I'll see you in the next episode!