Investor buying intent still muted
Property investors remain cautious heading into the next 12 months, according to the latest Crockers Property Management and Tony Alexander Investor Insight survey for April.
Among the 162 respondents, 17% said they are considering buying another investment property in the coming year – up slightly from March’s dip but still well below levels seen earlier in the cycle. At the same time, 37% are thinking about selling, leaving “a net 20% of existing investors” looking to exit, a result the report says is “still consistent with a deteriorating trend.”
That softer mood matches wider market signals, with Cotality reporting three straight months of falling national sales volumes and “three subdued months in a row.”
Holding periods remain mixed. About a quarter of landlords have no plans to sell, while others are split between short‑term (around a year) and five‑to‑10‑year horizons. Investors who do plan to re‑enter the market continue to favour existing stock over new builds, reflecting concerns about construction costs and development risk.
Even so, first-home buyers are holding up as a key source of demand, taking more than 27% of purchases nationwide in Q1 and around 30% in Auckland, according to Cotality.
Rent rises planned, but pressure is easing
Despite softening demand, most landlords still expect to lift rents. The survey notes that “a net 46% of existing investors plan raising their rents over the coming 12 months.” However, the average planned increase has eased to 3.7%, the lowest in the survey’s history, down from 4% over the previous three months.
The report suggests this pullback is linked to “the high supply of rental property set against relatively weak demand for accommodation from tenants.”
Realestate.co.nz data show rental stock also tightening modestly in March, even as national average rents eased 2% to $632 a week, masking sharp regional differences.
Interest rate worries spike as some head for the exit
The sharpest shift is in investor perceptions of interest rate risk. Alexander notes that “concerns about interest rates however have soared over the past four months,” initially as the economy recovered and more recently as investors brace for higher inflation tied to tensions in the Middle East.
These worries are now one of the top concerns for returns, alongside council rates and insurance costs. Yet interestingly, the survey also highlights “a downward trend in the proportion of existing investors concerned about meeting their mortgage payments”, suggesting many landlords still feel reasonably secure despite rate volatility.
Among those preparing to sell, retirement and weaker returns dominate. The report says “the two main factors cited were funding retirement and returns from residential property investment no longer stacking up,” although 15% of planned sellers intend to reinvest in another residential property.
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