Property investors and first-home buyers (FHBs) have become more cautious this year, resulting in a decrease in activity in the market, according to a survey of mortgage advisors by independent economist Tony Alexander.
The survey found that investors and FHBs have become more cautious in their approach to the housing market around the country – with property investors being more cautious, with a net 46% of mortgage advisors reporting that they are fielding fewer inquiries from investors. In February, only a net 5% of respondents said they were seeing fewer investors.
NZ Property Investors Federation executive officer Sharon Cullwick said that the previous increase in investor activity was driven by investors buying property before the well-signalled loan-to-value ratio (LVR) restrictions for investors comes into play at the end of April.
“I think the high level of buying we have seen over the last few months was always going to come to an end when the Reserve Bank lending restrictions came into effect,” Cullwick said.
Alexander added that the government might have been too quick to disincentivise rental property providers.
“Had the Finance Minister had this result and a few others like it in hand, he may have been less inclined to take last week’s step of removing tax deductions from rental property revenue,” Alexander said.