by Paul McBeth
New Zealanders are increasingly in love with residential property investment, in spite of recent market data showing low turnover and declining values as well as doubts over the merits of such investment.
ASB Bank's latest investor confidence survey shows that:
The survey asks people to rank the form of investment they think is currently most likely to give the best return. Until now, residential property and managed funds have been less than a couple of percentage points apart - the latest survey shows the biggest ever gap between the options.
ASB Bank's Chief Manager Investment Services Roger Perry said the survey results probably reflected a general sense of wellbeing about the country's economic prospects, rather then a perception that the property market was about to pick up.
However, Brian Gaynor, writing in the New Zealand Herald last year, bemoaned our "unhealthy addiction to bricks and mortar" caused in part by a negative reaction to the 1987 sharemarket crash and dramatic changes to bank lending policies.
Meanwhile, investment adviser Duncan Balmer says that his recent book "Stop! Do not invest in residential property..." demonstrates that all of the alleged tax benefits of property investment are either irrelevant or complete garbage and that, in most cases, the tenant does not pay the mortgage (Go to the Good Returns bookstore for details).