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

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Saturday, September 26th, 8:20AM

News

rss
Latest Headlines

Investors' market share on the rise

Concerns about the rising costs of being a landlord aren’t deterring investors with new data showing that mortgaged investors’ share of purchases surged to a four year high in July.

Thursday, August 20th 2020, 1:42PM 2 Comments

by Miriam Bell

CoreLogic's Kelvin Davidson

There’s no doubt that mortgaged investors are a rising presence in the market, with CoreLogic’s latest Buyer Classification data showing they accounted for 27% of purchases in July.

That share of the market is their highest since the third quarter of 2016 – when the Reserve Bank imposed a 40% deposit requirement* on investors.

While mortgaged investors share of property purchases increased, existing owner-occupiers share of purchases dropped to 24% in July.

First home buyers (FHBs) share of purchases also held up, edging higher to 24% in July.

CoreLogic senior property economist Kelvin Davidson says the data shows investors’ appetite remains pretty strong - despite government policy measures which have raised the costs of being a landlord.

“Provided that the current move to alert levels three and two is short-lived, there’s little reason to expect these buyer patterns to change in the near term.”

Those national patterns were replicated in Auckland, with existing owner-occupiers’ market share dropping lately, but the figures for mortgaged investors and FHBs continuing to improve.

Dunedin is another clear example of the continued appetite of mortgaged investors, Davidson says.

“Indeed, they got off to a very fast start in the third quarter, accounting for 36% of purchases in July, as well as a higher number than a year ago.

“This is a pretty notable result, especially given some signs of weaker property prices (which might ordinarily make investors cautious) as well as still-restrained lending policies at the banks.”

Investors may have issues with recent policy and legislative changes, but Davidson says that if you look at the investment alternatives, property still seems like a good option.

“It seems that many property investors might just opt to leave their money in property and wear the extra costs.”

When it comes to a broader outlook, Davidson says New Zealand’s housing market has clearly been through some significant disruption in recent months and, unfortunately, there’s more to come.

“Sales volumes in June and July had rebounded strongly from the earlier collapse, but we’re now likely to see activity drop off again on the back of the latest move up the alert levels.”

Looking ahead, after a period where optimism had returned, there will now be a new phase of uncertainty and downside risks to property market activity, if not prices too, he adds.

“That said, the two-week extension of the wage subsidy (to 15th September) and the same for the mortgage payment deferral scheme (to 31st March next year) should both help to soften the blow.”

* In the wake of Covid-19, the Reserve Bank has temporarily removed the LVR restrictions until at least May next year.

Tags: Auckland CoreLogic house prices housing market investment Lending LVR market outlook mortgage holiday mortgages property investment RBNZ regulation Reserve Bank wage subsidy

« Free Investment Property Showcase Events: Auckland, Wellington and ChristchurchClouds remain over housing market »

Special Offers

Comments from our readers

On 21 August 2020 at 11:09 am davidho said:
So much for the scaremongering regarding the new Tenancies Act. Its about time we saw less of a vested interest commentary from the various landlord groups. By the way I have several residential rental properties and I am happy to have them compliant with excellent client relationships.For those that find it too tough, sell and try getting a 80% bank loan to buy a parcel of shares and achieve tax free capital gains that of course get little mention.
On 21 August 2020 at 6:49 pm Property Leader said:
I do laugh and scoff at predictions of Property prices Doing this and that. Being in the market is everything. The bigger the portfolio the easier it is to buy more rentals. The government laws and tax moves are all playing into my hand.

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 4.55 2.55 2.69 2.79
ANZ 4.44 3.15 3.25 3.39
ANZ Special - 2.55 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.15 3.29 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
Lender Flt 1yr 2yr 3yr
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 3.85 3.95 -
HSBC Premier 4.49 2.45 2.60 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 ▼2.45 2.65 2.79
Kainga Ora 4.43 2.93 3.07 3.24
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.79 2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
SBS Bank 4.54 3.05 3.19 3.25
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 2.55 2.69 2.75
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 2.79
The Co-operative Bank - Standard 4.40 3.05 3.19 3.29
TSB Bank 5.34 3.29 3.45 3.59
TSB Special 4.54 2.49 2.65 2.79
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 3.15 3.29 3.39
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.69 2.79
Median 4.55 3.00 3.13 3.02

Last updated: 21 September 2020 10:48am

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