Investors back restrictions on foreign buyers
Six out of 10 landlords, real estate agents and property managers think there should be a restriction on what foreign property investors are allowed to buy in New Zealand, new research from Crockers shows.
Monday, June 2nd 2014, 12:00AM
by The Landlord
The latest Crockers Market Research showed that 25% of investors and other "involved parties" had no problem with foreign investors buying property but 60% thought there should be limits on what they could buy.
Another 14% thought they should not be allowed to buy property in this country at all.
Most who wanted restrictions especially wanted controls around the purchase of townhouses and suburban houses. There was much higher acceptance of foreign buyers owning commercial properties, and, to a lesser extent, apartments.
Seventy per cent said it was acceptable for foreign buyers to purchase commercial properties, compared to 43% who said it was acceptable for them to buy suburban houses.
One in five said they did not know what type of property was acceptable for foreign investors to buy.
The survey was conducted before this year’s Budget and 61% of respondents said they wanted to see the Government address the issue.
The survey found a higher proportion of Auckland property investors expecting the performance of their investments to be worse within the next year than in previous months. More investors were planning to make no change to their rental property portfolios over the next 12 months.
Crockers also reported that while rental returns were relatively stable in Wellington and Dunedin, at 4.8% and 5.5% respectively, Auckland's returns had dropped while Christchurch's had increased.
Since 2012, Auckland's average rental return is down 0.6%, driven by rising prices. It is now at 4.1%.
But strong demand has pushed Christchurch returns up 0.3%, putting them almost a percentage point above Auckland's, at 4.9%, on average.
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