Most residential property investors are still confident that property values and rental income will continue to rise, according to the latest 2016 ANZ Property Investment Survey.
The survey showed 84% of investors expect values to increase by 2.5% or more in the next year and 53% expect rental incomes to rise by 2.5% in the next year.
Two thirds said they plan to buy again at some point, a trend the survey noted was likely fueled by falling concerns around interest rate volatility, which only 8% said was a worry.
Fifty-seven per cent of Auckland investors plan to buy again in the next two years versus 53% of investors nation-wide.
With recent regulatory changes to loan-to-value ratio limits in effect, 31% of property investors said the limits on high LVR lending had significantly impacted on their strategy over the past year, up from 16% in 2015.
Nearly half of these investors (14% of all investors) said they had not bought a property they would otherwise have bought.
But 89% plan to hold on to their property for the longer term and ANZ
head of mortgages Glenn Stevenson said this shows investors continue to see property as a long-term investment.
“Despite their concerns, and through changes in regulations which have had a significant impact on investors’ strategies, a major theme of recent years remains: investors continue to see property as a long-term investment,” he said.
“They are holding on to properties and seeing significant reductions in their LVR levels, primarily through capital gain.”
“The data that we’re starting to see both at ANZ
and at a market level suggests the same sort of thing – you are starting to see a slow-down in investor lending within the market place,” Stevenson said, speaking to NZ Adviser
But he added, even though respondents said the speedlimits have impacted investors' strategy, their intention to buy again in future shows they still view property as a great investment path.
Waikato investors had the highest expectation that values would increase over the short term, with 98% expecting increases in the next year.
In contrast, Canterbury investors were the least optimistic about rentals and values, with 55% expecting rental income to hold or decline over the next year; and 88% expecting values to rise in the next year.
The annual ANZ
Property Investment Survey is run in conjunction with the NZ Property Investors’ Federation.