How To Spot a Soft Market (And Why It's The Best Time To Buy)

The best time to buy an investment property is when prices are low and the market is slow. Here's how you spot that market.

In the age of information, it’s easier than ever to be overwhelmed by a flood of headlines, articles, social media opinions, and advice from self-proclaimed experts.

The challenge isn’t just finding answers, it’s knowing which answers are actually true.

When it comes to property investing, falling down the rabbit hole of misinformation can lead to poor choices and missed opportunities. That’s why evidence-based research, not speculation, should always guide your decisions.

In this article, we’ll break down what a soft property market really is, the key data points that indicate one, and how savvy investors can use this knowledge to take advantage of the best time to buy.

What Is a Soft Property Market?

At its core, a soft market, often referred to as a buyer’s market, is a situation where there are more sellers than buyers.

When supply exceeds demand, prices tend to fall as vendors compete to attract fewer active purchasers. This isn’t unique to real estate; it’s true in almost every market. But in property, this dynamic can be especially powerful.

In a soft property market, you’ll often see:

• An oversupply of listings compared to active buyers
  

• Vendors offering incentives (discounts, upgrades, or better terms)
  

• Longer negotiation windows, giving buyers more time to make informed decisions
  

For investors, this represents an ideal window: more choice, less competition, and better value.

The Key Indicator of a Soft Market: Days on Market (DOM)

One of the most reliable metrics used to measure property market conditions is “days on market” (DOM).

This figure shows the average number of days it takes for properties to sell after being listed.

• In a hot market, DOM is low: properties sell quickly, often with multiple offers or even bidding wars
  

• In a soft market, DOM increases: properties stay listed for longer as demand slows down
  

Real-Life Examples

To see this in action, let’s look at New Zealand data:

• November 2021 (hot market): The median days to sell was 29 days, according to REINZ. Properties were flying off the shelves
  

• August 2022 (soft market): The median days to sell increased to 49 days, reflecting a clear slowdown and more bargaining power for buyers
  

This difference may seem small, but in real estate, it’s huge. A longer DOM often signals motivated vendors, softer prices, and more opportunities for negotiation.

Why a Soft Market Benefits Investors

Here’s why seasoned investors love soft markets:

1. Price Discounts and Incentives

When properties sit unsold for weeks or months, vendors become more open to negotiation. In some cases, developers will even offer incentives such as:

• Price reductions
  

• Free upgrades (e.g., appliances, landscaping)
  

• Contribution towards legal fees
  

This is the opposite of what happens in a hot market, where buyers compete and prices often escalate above asking.

2. More Time to Make Decisions

In a hot market, buyers often feel rushed into making offers. In contrast, a soft market gives you breathing room.

• You can spend more time on due diligence
  

• You can compare multiple properties without fear that they’ll be snapped up overnight

  
  

• You can negotiate calmly, without emotional bidding wars
  

This additional time helps investors make rational, evidence-based choices rather than emotional ones.

3. Motivated Vendors

In slow markets, sellers often switch between agents multiple times in an attempt to secure a deal.

This signals strong motivation and creates opportunities for investors who can negotiate effectively.

Motivated sellers are often willing to:

• Accept lower offers
  

• Agree to flexible settlement dates
  

• Include favorable terms that reduce risk for buyers
  

How to Spot a Soft Market Before Everyone Else

The best investors are proactive, not reactive. Here’s how you can spot signs of a softening market early:

1. Track “Days on Market” trends via REINZ or CoreLogic reports. Rising DOM is a red flag for sellers but a green light for buyers
   

2. Watch listing volumes. An increase in unsold stock (especially in new developments) suggests supply is outpacing demand
   

3. Look for incentive-heavy campaigns. Developers offering “bonuses” often signal a softening market
   

4. Monitor auction clearance rates. Low clearance rates mean fewer buyers are meeting vendor expectations
   

By watching these markers, you can position yourself to buy before the market rebounds and prices rise again.

The Bottom Line: Evidence Over Opinion

A soft market is not a “bad” market; it’s an investor’s market. Prices soften, negotiation power shifts, and buyers have the upper hand.

However, while market timing is powerful, it’s no substitute for research. Always base your decisions on real data, not noise from social media or water-cooler conversations.

Relying on trusted property professionals and evidence-based insights is the best way to avoid the pitfalls of poor advice and seize the opportunities a buyer’s market presents.

Final Thoughts

Property investing doesn’t need to be about guessing where the market is going; it’s about reading the signs, using the data, and acting strategically.

If you learn to spot a soft market early and use it to your advantage, you put yourself in the best position to buy well and maximise returns when the cycle inevitably turns.

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We help Kiwis build wealth through property investment. Our advisors will take the time to understand your individual needs and recommend suitable investment properties to help you build wealth and set up your retirement.

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We use a 3-step process:

1. We start with a Discovery Meeting where we learn about you, your goals, etc., and you learn more about us.

2. This is followed by a Strategy Meeting where we model your retirement plan, understand key investment concepts, and briefly touch on some investment choices.

3. Finally, an Asset Selection Meeting where we discuss investment options in more detail and make any recommended adjustments based on what we now know about you.

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What We Do

We offer end-to-end New Zealand property investment advice, helping Kiwi investors grow wealth through smart, data-led decisions. Our focus is on quality new builds in strong locations, tailored to your goals, guided by a team that knows the NZ market inside out.What We Don’t Do

We don’t do KiwiSaver, shares, cryptocurrency, or broad financial planning. Thrive is not a generalist firm. We specialise in property investment in New Zealand because that’s where we deliver the most value. By staying focused, we cut through the noise and help our clients make confident, well-informed property investment decisions.

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