Era of the shrewd investor
Friday, December 19th 2008, 9:38AM 
5 Comments
Last week I bemoaned the state of the housing market and the fact that we hadn’t seen much positive news in the November real estate numbers.
Well I feel happier this week after reading two surveys on what people are thinking about the housing market.
The key point being that many people are seeing the glass as half full and now is shaping up to be a good time to buy.
The first of the surveys was done by Landlords.co.nz and Mike Pero Mortgages, the second by ASB Bank.
A difference between the two is that the former is of investors while the latter has a more general audience including owner-occupiers.
With this difference in mind it is understandable that the Landlords.co.nz/Mike Pero one was more positive.
Two key trends to emerge are firstly, that people are getting more interested in buying residential property and can see opportunities.
The second, and slightly worrying for vendors, is that both audiences expect house prices to fall some more.
This also makes one of the other points a little more logical. More than half of the investors surveyed have increased rents in the past year, and at the same time interest rates are coming down. Both these factors are positive for investors and compensate, somewhat for the predicted lack of capital gains.
While I was unhappy with the news last week, this week I feel more positive and expect that we will see some more positive things happening in the housing market – however my caveat is don’t expect things to return to the level they were at 12 to 18 months ago. Those times are still years away. Big house price increases (some would argue any increases) are still well into the future.
The time now is for astute purchasers. Are you one of these people?
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Comments from our readers
On 19 December 2008 at 4:42 pm Meghan said:
Now is a good time to purchase an upgrade for yourself and rent it out for a few years prior to moving in. The houses in the mid-range are everywhere, so you have a huge choice. Buy now, but sell in the upturn!! On 20 December 2008 at 12:04 pm Geoff Webster said:
Everyone agrees it's a good time to buy however the NZ financial institutions need to relax their lending criteria requirements if they want to entice overseas investors, ie from OZ. We have a number of investment properties and are cashed up however the NZ banks didn't want to know us. They were quite prepared to lend to one the partner's separately who is based in NZ but because the other two partners are OZ based, it was a different story.
One would have thought to stimulate demand that foreign investors would be encouraged. We are extremely frustrated with the current tightening and the lack of vision shown by the NZ financial institutions and are now looking at purchasing investment properties in the US instead.
On 13 January 2009 at 5:57 pm John said:
I have purchased one property in Auckland already. I dont think it was a huge bargain, but perhaps about 5% cheaper. But I am happy since I think its onwards and upwards from now on. Dont agree with all those that say the market has further to fall (least not in Auckland). I think interest rates are so good now that buying is now relatively low risk and returns ok. Of course I am looking at long term benefits which is how you should view the real estate market. On 14 January 2009 at 12:15 pm Hamish said:
Cashflow positive properties will create a floor for house prices.
Attracting overseas investors is not the job of the banks Geoff. I am still able to do quite good loans for overseas investors, usually with a 20% - 30% deposit. This is quite attractive compared to other countries.
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Just my 2c