New Zealand property investors are raising rents and seeking new houses to buy, suggesting optimism may return as the market climbs out of its slump.
Wednesday, September 10th 2008, 10:57AM
by The Landlord
Some 20% of property investors in the inaugural Landlords.co.nz quarterly survey plan to buy another rental property this year. By the end of 2009, 52% of those polled plan to buy another property. The online survey of 600 investors was taken last week.
Demand for residential properties has tumbled in the past few months, based on government figures, reflecting weaker consumer confidence in an economy that’s probably fallen into recession. Home building consents held near a 22-year low in June and July, according to Statistics New Zealand.
The central bank started cutting interest rates in July though lenders haven’t yet rushed to offer cheaper home loans, in part because they tap overseas markets for the funds and rates are still relatively high.
Investors are split on the outlook for property prices over the next six months, with 43% predicting no change, and 48% expecting a decline. A property slump hasn’t prevented investors from fattening their yields though, with 46% saying they increased rents in the past six months, compared to 7.8% who cut rentals.
For 73% of the investors, increases in rents were between 1% and 10%, while 76% said they have never decreased rents.
On the outlook, 59% expect rents to remain the same over the next six months, while 29% expect an increase and 12% predict a decline.
