Property investment takes huge hit - survey
Wednesday 18 Aug 2010 9:53 a.m.
In 2009, one in four of those surveyed said they intended to buy residential property as a future investment; 12 months later it is in stark contrast – just one in seven have the same intentions.
Specialist property lawyer Greg Towers says the real estate market report confirms what those in the industry have been observing.
“This is unlikely to change until there is uplift in the general economy and a greater degree of confidence shown in the property market by all parties,” he says.
The survey also found there is clear intention among investors who own property to hold rather than seel – which is a clear indicator of why the property markets in general has slowed, says chief executive of realestate.co.nz Alistair Helm.
“The survey highlighted the caution around the market at the moment. Holders of investment property showed a 42 percent decline in intention to sell – which is a huge decline,” he says.
“As a result, there is the likelihood that those investors still looking to find value will target private sellers who they perceive to offer better deals in this type of ‘buyer’s market’.”
The challenging market conditions and general uncertainty are factors that have been circling the industry for some time; however, the survey is the first published data since the Government’s announcement of the tax changes to property investment, says research director for The Nielsen Company’s online division, Tony Boyte.
“The property boom made it easier for people to predict the market trends,” he says.
“Recent events seem to have muddied the waters over how much, up or down, price has moved.
“From our research, this appears to have caused people to put on hold plans to invest in residential property.”
The survey was conducted during April, May and June of this year, involving 1,225 respondents with a margin of error of 2.86 percent.