Property market will survive test: REINZ

Commenting on recent reports which have identified a strong revival of interest in property investment, on the back of dismal performances by equity markets and managed funds, Woodley said the ‘flight to safety’ by many investors burnt by managed equity funds, back into investment property confirmed the Institute’s view that most New Zealand investors were happier with the level of risk provided by property.

"We have known for some time that property is a very steady performer when both risk and return are taken into account. The rental returns may not always as high as equities, in a good year, but equally you don’t get the big swings in value. What’s happening now is that money is flowing back into commercial and residential investment property, and at a considerable rate."

"That will be a big test for the market because too much money coming into the market too quickly could have the effect of inflating values unsustainably."

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