Report shows property and mortgage plans within the next 12 months
With this year’s COVID-19 lockdowns and housing reforms, the property industry is riddled with concerns about the impacts of a wide range of indicators on investor insight – and that’s what Crockers Property Management (Crockers) and economist Tony Alexander delved into in his latest monthly Investor Insight survey.
The October survey, which received 577 responses, found that a gross 28% of property investors who responded are thinking about buying another property within the next 12 months, up from 25% in September, suggesting that the impact of the March 23 tax announcement has already passed.
It also found no trend change in existing investor selling plans, with a gross 24% of property investors claiming they plan to sell, another recovery from the previous month’s easing and proof that the broadly negative impact lockdown had on buying and selling sentiment reversed this month.
Read more: Realtor reveals how property investors manage recent tax changes
Focusing on the impacts of tax changes on investors these last few months, Lodge Real Estate revealed that its agents noticed a trend of property investors “rotating” properties in their portfolios, selling off older properties to buy newer ones as they try to manage their investments against the changes.
However, the Crockers-Alexander survey showed that an overwhelming majority of residential property investors plan to keep their properties for the long term.
When buying another property, investors were torn between buying a new property or an existing one as they consider the medium to long-term implications of the government’s plan to remove resource consent requirements for intensified developments in the top five cities.
The survey also found a near equal split in investor preference regarding the type of property they would buy between a standalone house and a townhouse, but a strong preference in size remains for two- to three-bedroom homes. For those intending to buy an existing property, the overwhelming preference remains for a standalone house. However, the survey noted that townhouse purchasing intentions may be rising marginally.
Crockers and Alexander also looked into how investors would handle their mortgage rate renewal and found that over 30% of respondents with a mortgage interest rate coming up for renewal plan fixing for three years, while 27% favoured the two-year term. Meanwhile, the 54% of investors paying down principal has remained unchanged since June.
