tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Budget Briefing Friday - click here for details Dismiss
Last Article Uploaded: Thursday, May 30th, 6:45PM

News

rss
Latest Headlines

Rental property confidence dims

Confidence in rental property as an investment option is flatlining nationwide – thanks to the uncertainty surrounding the housing market.

Wednesday, May 15th 2019, 6:08AM

by The Landlord

That's according to the latest ASB Investor Confidence Survey which shows that confidence in rental property providing the best returns remains largely static on 13%.

This figure holds true for respondents around the country, including Auckland.

It stands in stark contrast to respondents’ confidence in their own homes providing the best returns.

Nationally, 22% of respondents viewed their own home as providing the best return on investment, but this masked a regional split.

That’s because perceptions that respondents’ own homes will provide the best return on investment are at an all-time high (of 26%) in the regions, but at a four-year-low (of 15%) in Auckland.

ASB senior economist Chris Tennent-Brown says the latest survey reflects uncertainty from a number of factors and shows just how all over the place sentiment is regarding housing.

Auckland respondents’ lack of confidence in both owner-occupied and rental properties is because the Auckland market has been going nowhere for the last few years, he says.

“It’s expensive, you have foreign investment rules and bright-line tax tests impacting investors, recent uncertainty over capital gains tax, and just outright poor affordability because prices have gone up so much in earlier years – all weighing on the mood.

“It’s had support from lower interest rates and population growth, but not enough to overcome all these other negatives.”

Outside of Auckland respondents’ confidence in owner-occupied property has never been higher, but the same is not true for rental property.

Tennent-Brown says that’s because no matter where you are in New Zealand, rental property is being impacted by the same uncertainties: tax changes, LVRs and, until recently, the threat of a capital gains tax.

“However, the Reserve Bank has just cut interest rates which is positive for the housing market everywhere. We expect the latest dip in mortgage rates will provide a bit of support to the market and lift prices in areas where they’re not overstretched.

“In contrast, for parts of Auckland we continue to think prices won’t be going up for a while, but they aren’t expected to fall either.”

In a broader sense, the survey shows that overall investor confidence is up by 5% to 15% from the two-year low of 10% it sunk to in the last quarter of 2018.

Tennent-Brown says this recovery is being driven by fewer people feeling things will get worse, rather than an increase in the percentage of those feeling more positive.

However, he is disappointed to see investor confidence in growth-orientated investments has remained subdued at a time when sharemarket performance has been so good.

“Shares, KiwiSaver, and managed funds all trail rental property and even term deposits when it comes to perceptions about the investments that will provide the best return.”

Tags: ASB Auckland house prices housing market interest rates investment property investment rental returns

« NZ sales on downbound trainDon’t count on a market upturn »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

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
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.14 6.79 6.65
ASB Bank 8.64 7.14 6.75 6.39
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.14 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.74 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.89 6.55 6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 ▼7.65 ▼7.25 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.09 7.59 7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.74 7.29 6.59
SBS Bank Special - 7.14 6.69 5.99
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 ▼7.84 7.35 ▼6.99
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - ▼7.24 6.75 ▼6.39
Median 8.64 7.19 7.27 6.65

Last updated: 28 May 2024 11:21am

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