Mum and dad investors have returned to the property market post-COVID-19 lockdown, according to Century 21 New Zealand.
A joint report by the Real Estate Institute of New Zealand (REINZ) and independent economist Tony Alexander revealed that one in four agents noticed more investors in the market in June, up from a net 16% in May.
According to Century 21 owner Derryn Mayne, mum and dad investors are keen to climb the property ladder once again because the cost of borrowing is at a record low, reduced bank deposit rates drive investors to seek better returns, and rents remain stable nationwide. The Reserve Bank of New Zealand (RBNZ) also scrapped loan-to-value ratios (LVRs).
“Our Century 21 offices are reporting more enquiries from the likes of city investors now taking a greater interest in the regions. Given the ongoing strength of our regions, this makes perfect sense,” Mayne said.
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Meanwhile, retirees have been ignoring commercial building investments and syndications due to economic fallout from the COVID-19 pandemic.
“Increasingly, residential property is looking like a good place to put your money. Housing demand still outstrips supply and sale prices continue to defy any doom and gloom,” Mayne said.
“While rents in some areas will no doubt soften, the returns remain way better than bank interest, and of course, a solid capital gain will always be delivered in the medium to long term.”