Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


ANZ survey shows property investors remain cautious

Media Release
For Release: 6 September 2011

ANZ survey shows property investors remain cautious

Property investors continue to play it safe, focusing on consolidation rather than growth, according to the latest ANZ Property Investment Survey released today.

The survey reveals that most investors now intend to hold onto their properties for the longer term, with fewer looking to purchase more property.

ANZ New Zealand General Manager Specialist Distribution Craig Moffat said property investors were showing realistic expectations of price increases and anticipating modest rent rises.

“This suggests investors understand that the dynamics of property investing have changed. They are wisely managing their portfolio as a business, focusing more on achieving positive cash flow and managing risk, rather than capital gains.”

Plans to raise rents as a result of the 2010 May Budget appear to have eventuated – with 27 per cent of investors planning increases in 2010 due to the changes, and in 2011 some 26 per cent had increased their rents as a result of the Budget.

The survey of property investors throughout New Zealand, run in conjunction with the NZ Property Investors’ Federation, asked about issues affecting the residential property market and where investors thought the sector was heading over the next 12 months. This year’s survey received a record 1,800 responses – almost double the number last year.

The survey shows that investors are expecting modest increases to property prices – around 2.5 per cent over the next 12 months, and 6-10 per cent over the next five years. This is slightly more optimistic than last year, with 71 per cent expecting an increase in 2011, compared with 59 per cent in 2010.

Eighty per cent of investors said they were expecting rents to increase over the next 12 months (an average of up to 5 per cent) and 98 per cent expect an increase over the next five years (an average of 6-10 per cent).

NZ Property Investors’ Federation President Andrew King said the prospect of higher rentals was a natural expectation among many investors. "Rental prices have not kept pace with general inflation or the price of properties, so when combined with tax changes, rental increases are overdue in many cases."

Owning in a family trust is now less common (30 per cent in 2009 down to 23 per cent in 2011). Investors who previously owned property under an LAQC now mainly own their property in a Look Through Company. The two main structures overall are now Look Through Companies (39 per cent) and Owning in Your Own Name (40 per cent).

"Investors are clearly reviewing the most appropriate ownership structure in an evolving environment. The popularity of Look Through Companies, in particular, was interesting. With increases in rental prices and the withdrawal of building depreciation, I would have thought more owners would have chosen Qualifying Companies as an appropriate structure for their rental properties," Andrew King said.

Government regulations and tax changes are now considered the biggest risk for investors (26 per cent, up from 13 per cent in 2010). Other risks such as tenants defaulting on payments, properties remaining vacant, and property prices falling have decreased this year.

This year’s survey also reveals that almost 40 per cent of investors have examined their insurance cover as a result of the Canterbury earthquakes.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Serious Fraud Office: Commences Enquiries Into Allegations Of COVID-19 Wage Subsidy Fraud
The Serious Fraud Office has commenced a number of enquiries into alleged abuse of the Government’s COVID-19 Wage Subsidy. Director Julie Read said the allegations relate to multiple complex cases of potential fraud that have been referred to the agency following extensive investigations ... More>>

Environment: Preliminary Environmental Data On New Zealand’s Air Quality Released Today

The Ministry for the Environment and Stats NZ have published the Our air 2021: preliminary data release today. We are currently working to revise the Our air 2021 report to incorporate analysis of the World Health Organization (WHO) 2021 air quality guidelines that were released on 23 September 2021... More>>

Statistics: Food Prices Rise For Sixth Consecutive Month
Food prices rose 0.5 percent in September 2021 compared with August 2021, mainly influenced by higher prices for grocery food and meat, poultry, and fish, Stats NZ said today. September’s movement is the sixth consecutive monthly rise. After adjusting for seasonality, prices rose 0.9 percent... More>>

Reserve Bank: Robust Balance Sheets Yield Faster Economic Recovery

Stronger balance sheets for households, businesses, financial institutions and the government going into the pandemic contributed towards maintaining a sound financial system and yielding a faster economic recovery than following previous deep recessions... More>>

Transpower: Releases Independent Report Into Events Of August 9
Transpower’s Chief Executive Alison Andrew has today released an independent report into the grid emergency of August 9 when insufficient generation was available to meet demand, leading to some customers being disconnected... More>>

Bayleys: Latest Lockdown Adds Further Fuel To Industrial Property Market

The recent construction shutdown resulting from Auckland’s Covid 19’s lockdown restrictions has put additional pressure on an industrial property market that is already struggling to keep pace with demand... More>>