Reading between the lines data revealed by NZHerald in this article suggests property investors grabbed their pre-loan approvals with open arms before the forty percent deposit requirement came in from 1 October 2016 and in recent weeks the revised restriction has been very noticeable. However property investors are working with the restrictions using the value add strategy.
Auckland in particular is a more challenging market for property investors now and there has been a flattening off in property price rises. The properties typically grabbed by investors have taken the biggest hit namely apartments and multi level units. Sales Price data from Trade Me reported weakening price growth in September for these property types.
Property investors with pre-approved loans brought a lot of property in the regions which saw double digital growth for Wellington (11.8%), Otago (27.3%), Northland (15.5%) and Bay of Plenty (16.9 %) to name a few with property sales prices up on the same time last year.
The investment strategy that is still working well for property investors is the ‘value add’ which requires purchasing properties in need of renovation (usually more than a coat a paint). PropertyTutors the property mentoring company say their clients in Auckland and Wellington are doing very well right now.
Many investors need to improve their equity and cash position to fund further investments and the ‘value add’ strategy is working very well. Sean Wood of PropertyTutors said their recent Property Masters events attracted a lot more seasoned property investors keen to keep building their rental property portfolios.
Property investing has evolved and investors are more in tune with their financial position arguably more so than owner occupiers.
