Bargains galore but not much action

The property investment market has largely ground to a halt, despite ample bargains currently available.

Thursday, March 4th 2010, 2:00PM

by Maddy Milicich

Activity in the overall property market has flattened during the past couple of months, reflected in the huge number of listings coming on to the market and lack of sales.

Barfoot & Thompson saw the most listings in 23 months come onto the Auckland market last month, as 1,714 new properties became available.  

Investors appear to be sitting and waiting.

Geoff Lovegrove from The Professionals in Manurewa was expecting 2010 to be a good year for the market, but says activity suddenly stopped after the Tax Working Group announced its first recommendations on taxation of the sector in November.

"It was literally like a tap turned off," he says.

The market now appears to be in a state of wait-and-see, with the government due to announce tax changes in the May Budget.

But Lovegrove says with the number of listings on the market, there is excellent buying opportunities out there for investors unwilling to play the waiting game.

"There's awesome buys at the moment. I come across properties every day that if I was investing heavily at the moment I'd be buying - every day!"

He is still seeing deals with 7% and 8% yield in South Auckland and with rents only set to go up further to offset possible changes to tax and depreciation claims, he believes now is the perfect time for investors to be buying.

He has seen a "little bit" of investor activity recently, but says it is 50% down on September to November.

Waikato Property Investors' Association Nancy Caiger also believes now is the perfect time to buy.

"It's a good a time as any to buy if you're prepared to buck the trend. Buyers are panicking out of the market, so deals are out there."

However, she says finance and tightening bank criteria is holding a lot of investors back at present.

"People are still looking but finance is not always coming through."

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