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Investors driving lower end of Auckland market

Investors are responsible for over 40% of the activity at the lower end of Auckland’s housing market, according to new CoreLogic data.

Monday, May 25th 2015, 1:54PM

by Miriam Bell

CoreLogic figures released exclusively to landlords.co.nz show that, in the first quarter of 2015, multiple property owners (MPOs) bought a 42.2% share of the bottom 30% of Auckland properties*.

This market share has increased since the Reserve Bank bought in the 20% deposit LVR rule in 2013.

By comparison, in the third quarter of 2013, MPOs bought 38.8% of the bottom 30% of Auckland properties.

At the same time, the first home buyer purchase share of the lower end of Auckland’s market has dropped.

In the first quarter of 2015, first home buyers were responsible for a 26.8% share of the market. This was down from 29.5% in the third quarter of 2013.

CoreLogic's senior research property analyst Nick Goodall said first home buyers have been on the decline since 2006 anyway, but the 3% drop from 2013 to 2014 is quite pronounced.

When MPOs were broken down further - by the number of properties owned (2, 3-4, 5-9, 10+) - all of the groups, except for MPO 5-9’s, appear to have benefitted from less first home buyers entering the market, he said.

From the third quarter of 2013 to the first quarter of 2015, MPO 2’s market share increased to 14.5% from (13.7%), MPO 3’s share increased to 12.2% (from 10.4%), and the MPO 10+ share increased to 8.6% (from 7.3%).

Over the same time period, the MPO 5-9’s market share decreased to 6.9% (from 7.4%).

“MPO 2’s have been increasing in share since early 2011, while MPO 3-4’s have been on the up since 2010, but both showed a pronounced increase over the last 18 months, making up for the share lost by first home buyers.”

In comparison, each of the groups have been relatively flat (or slightly up) in the same value range across the rest of New Zealand.

However, Goodall said that the share of “movers” – ie: people selling their home and moving into another - also increased in the lower end value range of the Auckland market over the last two years.

The “movers” share went from roughly 16% in 2012 to 17%-19% in 2014.

While the lower end of the market has traditionally been perceived as the investors’ domain, Goodall said that, in reality, investors are active across all parts of the market.

“I think this means there is a mix of ‘speculators’ buying for ‘capital gain’ – who are more likely to be MPO 10+ people - as well as more ‘sensible’ investors buying for rental income and a secure asset.”

[*according to value]

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AIA 4.55 3.55 3.89 3.99
AIA Special - 3.05 3.39 3.69
ANZ 4.44 3.29 3.45 3.85
ANZ Special - 2.79 2.95 3.35
ASB Bank 4.45 3.35 3.19 3.85
ASB Bank Special - 2.85 2.69 3.35
Bluestone 4.44 4.44 4.29 4.34
BNZ - Classic - ▼2.79 ▼2.69 ▼2.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 ▼3.39 ▼3.29 ▼3.59
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 2.80 3.15 3.19
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union North 6.45 - - -
Credit Union South 5.65 4.75 4.75 -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Lender Flt 1yr 2yr 3yr
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.80 2.89 3.50
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC ▼4.40 ▼2.95 ▼2.95 ▲3.69
Kainga Ora 4.43 ▼3.29 ▼3.39 ▼3.85
Kiwibank 4.40 3.74 4.14 4.40
Kiwibank - Capped - - - -
Kiwibank - Offset 4.40 - - -
Kiwibank Special - 2.65 2.79 3.25
Liberty 5.69 - - -
Lender Flt 1yr 2yr 3yr
Napier Building Society - - - -
Nelson Building Society 4.95 3.75 3.99 -
Pepper Essential 5.18 - 4.98 4.98
Resimac 3.49 3.45 3.39 3.69
RESIMAC Special - - - -
SBS Bank 4.54 4.85 5.05 5.49
SBS Bank Special - 2.99 3.05 3.69
The Co-operative Bank - Owner Occ 4.40 ▼2.79 ▼2.95 ▼3.39
The Co-operative Bank - Standard 4.40 ▼3.29 ▼3.45 ▼3.89
TSB Bank 5.34 3.59 ▼3.59 4.19
TSB Special 4.54 2.79 ▼2.79 3.39
Lender Flt 1yr 2yr 3yr
Wairarapa Building Society 4.99 3.95 3.99 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - 2.79 ▼2.69 ▼2.79
Median 4.55 3.32 3.39 3.69

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