About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Sunday, September 22nd, 8:04PM
rss
Latest Headlines

Property investment yields down, but optimism remains

Property investors are becoming more cautious, although the latest ANZ Property Investors Survey shows they continue to expect strong returns from housing in the medium term.

Wednesday, May 7th 2008, 4:00PM

by The Landlord

One third of investors expect house prices to fall over the coming year and another third expect house prices to be flat to 2.5% over the next year. Collectively, over 70% on property investors expect house prices to decline or rise by less than 2.5%, up noticeably on last year’s total of 24%.

Cameron Bagrie, ANZ chief economist says this still looks optimistic considering the current interest rate environment, global conditions and the marked increase in real estate listings across the country. National house sales figures for March were down 52% and 56% in Auckland.


Looking further ahead, over the next five years 69% of those surveyed expect price growth between 2.5% and 10%, much the same as last year.

'The majority of investors expect weakness in the market to be a reasonably short-lived affair, which appears at odds with the historical pattern of house prices remaining flat for four years following an upward swing,' says Bagrie.

He believes that given the strength of the housing boom over the past six years and price of a typical house relative to average wage, we should not be surprised to see house prices give up some gains, thus improving affordability.

The survey also showed the majority of landlords expect solid rent increases, with 68% expecting increases from anything between 2.5% and 10% over the next year. Nearly three quarters expect rents to grow between 2.6% and 10% over the next five years.

With gross rental yields around 5% and current fixed mortgage rates hovering around 9-10%, the biggest challenge for landlords is negative net yield, particularly in a flat capital growth environment. The number of investors reporting a gross yield under 5% has increased from 51% in 2007 to 65% this year.

'Clearly landlords are under increasing cash flow stress and it’s hard to see this situation changing soon,' says Bagrie.

As expected, the survey shows intentions to buy have dropped, but a solid 39% of investors still plan to buy in the next 12 months, compared with 49% in 2007.

Similarly, investors are nervous about what changes the government might make, with 30% seeing regulation as a major risk. Changes to tax and loss attributing qualifying company (LAQC) rules was of particular concern, as was ring fencing of rental losses.



« Housing implosion confirmed: BrokerBuyers and sellers in a tug-of-war »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.15 ▼4.04 4.49
ANZ Special - 3.65 ▼3.54 3.99
ASB Bank 5.20 4.15 4.09 4.39
ASB Bank Special - 3.65 3.59 3.89
BNZ - Classic - 3.65 ▼3.49 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
Housing NZ Corp 5.19 ▼4.15 ▼4.09 ▼4.39
HSBC Premier 5.24 3.35 3.35 3.35
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 5.65 3.85 3.95 3.89
Kiwibank 5.80 4.30 4.34 4.74
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - 3.55 3.59 3.99
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.69 4.79 -
Resimac 5.30 4.86 4.14 4.19
Lender Flt 1yr 2yr 3yr
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.69 3.69 ▼3.89
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.65 3.59 3.99
The Co-operative Bank - Standard 5.15 4.15 4.09 4.49
TSB Bank 6.09 4.65 4.59 4.85
TSB Special 5.29 3.85 3.79 4.05
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Lender Flt 1yr 2yr 3yr
Westpac - Offset 5.34 - - -
Westpac Special - 3.65 ▼3.54 3.99
Median 5.35 4.15 4.09 4.19

Last updated: 20 September 2019 9:30am

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com