Obtaining finance a strictly Auckland issue
Difficulty in obtaining finance is the biggest challenge facing Auckland property investors, a problem not faced by those outside the city.
Sunday, September 30th 2012, 3:45PM
by The Landlord
The Auckland Property Investors Association (APIA) surveyed its members last week and respondents’ cited obtaining finance as their greatest challenge.
Yet according to NZ Property Investors Federation president Andrew King, finance isn't an issue he is hearing about from members.
"I think the banks are actually quite keen to lend money at the moment, they've actually been relaxing some of their rules to make it a little bit easier for people to borrow money," he said.
APIA president David Whitburn cited two factors for the situation in Auckland; the higher property prices and investors coming to the market without substantial equity.
"There are more investors starting to come back to the market that perhaps don't have quite the same financial resources or experience, they don't have as much equity so for them it is harder to get finance," he said.
The second most challenging issue highlighted by the APIA survey was how to secure cashflow properties in good areas, something King said has "always been a problem."
"Getting cashflow when interest rates were high was really hard, however, in the current climate, it is still difficult in good areas because the yields are still extremely low, but it's easier to do it now than it was three years ago," he said.
The issue respondents' identified as their third most pressing concern - the risk of Government policies adversely impacting property investment - had also been seen as a concern by King, though he was able to offer some reassurance.
"We've met with National ministers and they're basic thinking is that the depreciation and the LAQC changes were really all that needs to happen," he said.
"They don't want people withdrawing their investment because they don't want to have a drop off in supply."
One other surprise the survey revealed is members wanting to know more about renovating property, something Whitburn said hadn't appeared since 2007.
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