Holiday home ownership has never been a simple equation. There is mortgage, maintenance, along with the nagging suspicion that the timing may not be right. While these doubts are not unreasonable, they exist alongside a set of numbers that paint a nuanced picture of where the New Zealand short-term rental market actually stands.
What’s happening in the market right now
Here are a few stats worth looking at: occupancy reached 50.4% in 2026, up from 43% in 2025 – a year-on-year market gain of 17.2%. This lift in occupancy reflects a structural shift in demand, one that points to a more resilient domestic travel market and a broader recovery in visitor activity across the country. Occupancy across Bachcare’s managed portfolio finished February 2026, 7.2% ahead of the same period last year, with growth seen across both islands.
How different regions are performing
The South Island short-term rental occupancy has grown 36.9% year-to-date. Our own managed properties in the Southern Lakes have reflected this trend, recording occupancy growth of 29% year-on-year in recent months. Fiordland shows a similar momentum, with our portfolio recording 13% year-on-year occupancy growth (February 2026).
The North Island presents a varied picture, with market-wide occupancy growing 14% year-to-date. The Coromandel, Far North, Hawke’s Bay, and Auckland markets have all recorded around 6% occupancy uplift across our portfolio. These are steady gains and reflect the primary domestic nature of the demand in these markets.
Why bigger properties are winning
Perhaps the most actionable pattern in the current data is what is happening by property size. The short-term rental market in New Zealand is not growing uniformly across all property types, and the divergence has meaningful implications for anyone making investment decisions.
At the smaller end, the picture is mixed. Studio properties have seen occupancy decline 5.7% year-on-year. One and two-bedroom properties are growing but modestly — 7.3% and 8.9% respectively. The real demand surge is concentrated at the larger end of the market. Three-bedroom properties are up 20.9% in occupancy year-on-year. Four-bedroom homes have grown 36.1%. Five-bedroom properties are up 35.1%.
This does not mean that smaller properties are bad investments. Well-located, well-managed one- and two-bedroom properties continue to perform in markets with strong individual traveller demand, particularly in urban-adjacent locations and established short-break destinations. But the data suggests that owners with the means to acquire or upgrade to a larger property, in the right market, are entering a segment where demand is meaningfully ahead of supply.
The owners generating strong returns are not simply the ones in the best locations, although location matters. They are the ones making better operational decisions, more consistently, over the course of a full year. Three levers account for most of the difference.
Dynamic pricing is the most powerful. Adjusting nightly rates in response to real-time demand signals — local events, competitor availability, booking pace, day of week — consistently outperforms static pricing.
Minimum-stay strategy is the second lever, and one that is often underestimated. The right minimum stay for a peak event weekend in the Southern Lakes is very different from the right minimum stay for a quiet Tuesday in the Coromandel shoulder season.
Shoulder season activation is the third. The assumption that New Zealand holiday homes earn in summer and sit largely idle the rest of the year is increasingly outdated. A growing events calendar, rising year-round domestic travel, and the emergence of extended-stay bookings are creating genuine revenue opportunities across months that were previously written off. Properties that are priced and presented to capture shoulder season demand consistently outperform those that are not.
So, is a holiday home still worth it?
The data doesn’t make a definitive case for or against holiday home investment. However, it does clarify the conditions under which the investment works and the conditions under which it is likely to struggle.
It works when the property is in a market with genuine demand from both international and domestic travellers. It works when the property is sized and configured to meet the demands of the travellers (the surge in occupancy for more than two-bedroom properties signals that group and family travel may not just be a passing trend), and it works when someone is paying close attention to how the property is priced, positioned, and managed across the full calendar year and not just the peak weeks.
The difference between a passively held property and an actively managed one, in the same market and at the same location, is measurable. Owners who get this combination right are in a genuinely strong position in 2026.