Why Property Still Rises to the Top: A 2025 Look Back

Everyday Kiwis often find themselves at a crossroads when it comes to money. You work hard, you save what you can, and you want your money to grow. But where should you put it? It’s a classic conversation topic for a reason. Do you play it safe with the bank? Do you try your luck on the share market? Or is bricks and mortar still the best way to build wealth? 

It can feel overwhelming. There is so much noise out there: financial jargon, market fluctuations, and endless opinions. Today, we’re going to strip all that away. We’re going to look at the facts of investing in New Zealand over the last decade, for the period from 2016 to the end of 2025. 

We’ll compare four common investment paths: Bank Term Deposits, the Share Market, Managed Funds, and New Build Residential Property. More importantly, we’ll show you why one of these options consistently delivers outsized results, thanks to a “secret weapon” called leverage. 

The Four Contenders: Where Can You Put Your Money? 

Before we dive into the numbers, let’s quickly define who is stepping into the ring. 

1. Bank Term Deposits

This is the “sleep easy” option. You lend the bank your money for a set time, and they promise to give it back with a little bit of interest. It’s simple and low-risk, but as we’ll see, it offers very low returns. It’s a great place to park cash for a short-term goal, but not for building long-term wealth. 

2. The Share Market (Direct Investment)

This involves buying shares, small pieces of ownership, in specific companies. The potential returns are higher than the bank, but so is the risk. If the company you choose does well, you win. If it struggles, your investment can shrink. It can be a rollercoaster, and you need to know which horse to back. 

3. Managed Funds

Think of this as the “don’t put all your eggs in one basket” approach. Instead of picking one company yourself, a fund manager pools your money with other investors and buys a wide range of assets like shares, bonds, and property. It spreads the risk, but you pay fees for their expertise. 

4. New Build Residential Property

This is the Kiwi favourite. It involves buying a physical house or townhouse to rent out. The key difference here is that you generally don’t pay for the whole thing yourself. You use a deposit (often by tapping into the equity in your own home) and borrow the rest from the bank. 

A Decade of Data: $200 Challenge  

Let’s stop talking theory and look at real numbers. We ran a scenario to reflect historical data from the beginning of 2016 to the end of 2025. 

Imagine you had $200 a week to invest. You committed to putting that money away every single week for 10 years. That’s a total contribution of $104,000 from your own pocket over the decade. 

Here is how that money would have grown across our four contenders, based on real-world data (before tax and inflation). 

The Term Deposit Result 

Locking your money away with the bank feels safe. However, with interest rates averaging around 3-4% over much of this period (with some recent highs), the growth is minimal. After 10 years of diligent saving, your total return, the profit on top of what you put in, would be just $26,000. 

It’s better than nothing, but when you factor in inflation, your money’s buying power has barely budged. You’ve played it safe, but you haven’t really moved forward financially. 

The Managed Fund Result 

For this example, we used the NZX50, which tracks the 50 largest companies in New Zealand. This is a solid benchmark for a good managed fund. The period from 2016 to 2025 was a mix of strong growth followed by a period of correction. 

The result? A total return of approximately $41,000. 

This is a noticeable improvement over the bank. You’ve earned a healthier profit. But is it life-changing? It might cover a nice family holiday or a small car, but it’s not going to fund your retirement. 

The Share Market Result 

For consistency, we’ll stick with our previous example of a well-known company, Meridian Energy. Like the broader market, it has seen ups and downs. If you had invested your $200 weekly, you would have netted a return of around $75,000. 

Now we’re talking! That’s nearly three times the return of the term deposit. It shows that picking a solid company on the share market can be a powerful wealth-creation tool. However, the risk remains: if you’d picked a different company that struggled, that number could be zero. 

The Property Result 

Here is where the picture changes dramatically. Let’s say you bought a residential property in early 2016 at the national median price of about $500,000. You used that $200 a week to help with the mortgage payments. 

Despite market fluctuations, the median price by the start of 2026 is projected to be around $820,000. Your net return over that 10-year period? A staggering $320,000. 

That’s over four times the return of the share investment, and more than twelve times the return of the term deposit. 

Why is the difference so huge? The magic ingredient isn’t just that property prices went up. It’s leverage. 

The Not-So-Secret Weapon: Leverage Explained 

Leverage is a simple concept that has created more wealth than almost any other financial tool: it’s the power of using other people’s money to grow your own. 

When you invest in shares or term deposits, you are using 100% of your own cash. If you have $100,000 to invest, you buy $100,000 worth of shares. If they go up by 10%, you make $10,000. 

Property is different. Banks view residential property as a stable, secure asset. This means they are willing to lend you a large portion of its value. You might only need a 20% deposit, with the bank providing the other 80%. 

But here’s the crucial part: you get to keep 100% of the gains. 

Let’s break it down: 

• You buy a $600,000 new build investment property. 

• You put in a $120,000 deposit (often using equity from your own home, so no cash actually leaves your bank account). 

• The bank lends you the remaining $480,000. 

• The property value increases by just 5% in a year. That’s a $30,000 gain. 

Your $120,000 investment just made you $30,000. That’s a 25% return on your money, even though the market only grew by 5%. If you had put that same $120,000 into shares that grew by 5%, you’d have made only $6,000. Leverage amplifies your results. 

Why New Builds Sharpen Your Investment Edge 

At New Build Investor, we focus specifically on new build properties because they take the natural advantages of property and make them even stronger. 

1. Easier to Leverage (Lower Deposit)

Under current Reserve Bank rules, buying an existing investment property often requires a large deposit. New builds are frequently exempt from these strict Loan-to-Value Ratio (LVR) rules. This means you can often secure a new build investment with a 20% deposit, making it easier to get into the market and put leverage to work for you sooner. 

2. Reduced Costs and Hassle

Old houses come with surprises. Roofs leak, plumbing fails, and insulation needs upgrading to meet Healthy Homes Standards. A new build comes with a builder’s warranty and is fully compliant from day one. This means fewer headaches and lower maintenance costs, protecting your cash flow for years. 

3. Attracts Quality Tenants

Tenants love new homes. They are warm, dry, energy-efficient, and have modern kitchens and bathrooms. This means new builds often attract high-quality tenants faster, command higher rent, and experience fewer vacancies, all of which boosts your investment return. 

Is It Too Good To Be True? 

When people see the difference between a $26,000 return from the bank and a $320,000 return from property, a healthy dose of skepticism is normal. 

But notice the timeframe we used: 10 years. 

Property is not a get-rich-quick scheme. It’s a get-wealthy-slowly scheme. It requires patience and a long-term mindset. The huge returns come from the compounding effect of growth over many years, magnified by the loan you took out at the start. This strategy is how the majority of wealthy Kiwis have built their fortune. It’s about securing a tangible asset, letting a tenant help pay it off, and letting time and leverage do the heavy lifting. 

Take the Next Step 

The data speaks for itself. Over the long term, property, specifically leveraged property, has consistently outperformed other common investment options. If you own your own home, you may be sitting on usable equity that could serve as the deposit for your first investment. 

If you want to explore how this numbers game could apply to your specific situation, it’s worth a chat. You don’t need to be a financial expert to win this game; you just need to understand the rules and have the right team to guide you. 

About New Build Investor & Equiti

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