Many property investors are hoping to pick up a property bargain in the post-COVID market, but that might end in disappointment, according to the latest joint survey by the Real Estate Institute of New Zealand (REINZ) and independent economist Tony Alexander.
The joint survey revealed that only a net 32% of real estate agents see bargain hopes motivating investor demand, down from 60% in the REINZ-Alexander survey in May.
The REINZ and Alexander noted that bargain hopes continue to diminish month by month. In contrast, low-interest rates are now becoming the strongest factor driving investors into the property market, according to a gross 76% of agents – up from 68% last month.
“This strengthening may reflect comments from the Reserve Bank regarding the potential for lower interest rates next year, along with the continuing reduction in bank term deposit rates,” the REINZ and Alexander said, as reported by Landlords.co.nz.
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However, the survey also suggested that more investors seem to be motivated by expectations for an increase in prices – with a net 35% of agents seeing more investors being active in the market, up from 30% in August and 16% in May.
More agents also reported seeing fewer investors seeking to sell than looking to offload their property. For example, a net 6% of agents reported fewer investors selling in September, down from 16% in August and 14% in July.
“Fewer buyers generally retain fears that prices will fall, and a net 81% of agents report that they are seeing property prices rising. Listings remain in short supply, and many buyers continue to report that getting finance is relatively difficult,” the REINZ and Alexander continued.