Taranaki Property Investors' Association
Phone: 027 3738 057
A recent CoreLogic report has claimed that 46% of property sales in Auckland over the last month were to investors. This figure was obtained by counting the number of properties bought by people who have an existing home. Apart from investing, there are many other situations where this may occur, such as people buying a new home before they have sold their existing home, people buying baches and people buying apartments to use when spending time in the city.
Another trend over the last few years has been people buying a property for their own children to live in, especially when studying.
Many rental properties are owned by accidental investors, having inherited the property, rented it out while overseas, having moved for work commitments or because they couldn't sell their former home after buying a new one. In these instances, circumstances can change quite quickly, meaning rental properties tend to turn over at a faster rate than owner occupied properties.
In addition monthly figures can be quite volatile. During 2015 for example, there were some months when the percentages were 40% and 42%.
The real number of sales to investors is therefore likely to be lower than the report states. However the figures are still not unexpected. In Auckland, close to 40% of all properties are rentals, so you would expect that around this percentage of sales at any given time would be to investors. Lower socio-economic areas tend to have an even higher level of rental properties and therefore a higher number of sales in these areas are to investors.
The stories of homelessness reported in the media recently are dreadful and people seem to think that stopping investment in property would somehow help these people. Unfortunately it wouldn't. "The plight of these people demonstrate that we need more rental properties so that they have somewhere to live" says NZPIF Executive Officer, Andrew King.
It is always difficult to buy your first home and at this stage of the property cycle it is even harder. More houses are being built in areas where we need them and the unprecedented population increases will not go on for long, so the current market conditions will change.
"It is understandable that people want something done right now to help first home buyers but making it harder and more expensive for people to provide rental homes for tenants is not the answer" says King.comments powered by Disqus
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