Shifting trends among investors
According to the latest monthly Investor Insight survey by Crockers Property Management and Tony Alexander (pictured above), the property investment landscape is showing signs of caution among existing investors.
The survey, which gathered insights from 310 residential property investors, highlighted a continuation of weak net buying intentions despite eased concerns about interest rates and recent tax rule adjustments.
“The net buying intentions of existing investors remain weak despite easing worries about interest rates and removal of unfavourable tax rule changes,” Alexander said.
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Investment trends and decisions
A significant 33% of investors are considering selling their properties, a slight increase that suggests a growing inclination to offload investments. On the buying side, only 20% are contemplating purchasing additional properties within the next year. The survey shows a -13% net buying intention, indicating a stronger desire to sell than to buy, consistent with trends since mid-2023.
Rental market and property preferences
Investors display a consistent preference for standalone houses over townhouses, a trend that remains robust among those purchasing new dwellings. Regarding rental adjustments, there's a notable lack of movement, with the proportion of investors planning to raise rents remaining unchanged after an initial increase early in the year due to the migration boom.
Banking relationships and market concerns
The survey also revealed increasing concerns among investors about falling property prices, high council rates, and rising insurance, and maintenance costs. These factors are influencing investment decisions and could lead to heightened caution in the property market.
Additionally, investors reported a mixed banking environment, with some noting an easing in bank attitudes towards lending, which could affect investment strategies moving forward.
“There are now almost as many investors saying that banks are getting easier to deal with as say they are getting harder,” Alexander said.
Rental adjustments and long-term holding
Despite the population boom and a slowdown in new construction, the expected increase in rental prices has not materialised as anticipated. Instead, there was a noticeable trend of rent increases slowing down, possibly due to tenant income constraints and rising unemployment.
Most investors intend to hold their properties for over ten years, though there’s a mild increase in those planning to sell within five years.
Market outlook
Overall, the property investment sector appears cautious, with significant attention on economic indicators and market trends that could influence future investment decisions.
The continuing weak buying intentions among investors, coupled with concerns over costs and the potential for falling property prices, suggest a market in flux, with investors taking a more measured approach to their real estate portfolios.
To compare the latest figures with the previous survey results, click here.
Brokers, weigh in on Tony Alexander's latest property market insights. What trends are you observing in rentals and investments? Share here!
