First major survey of property investors released

Sunday 23 May 2004

First major survey of property investors released

By The Landlord

New Zealand Property Investors Federation, in conjunction with the ANZ Bank, has released a major survey of property investors in New Zealand.

It is believed this is the first such survey of property investors carried out in New Zealand.

Property investment is highly popular with New Zealanders as a way of saving, but until now little was known about the habits of property investors.

"The objective of the survey was to gain further insights and better understanding of property investors, the profile of porfolios held and the investrment process," New Zealand Property Investors Federation president Craig Paddon says.

He says this is vital because property investment is a big industry in New Zealand.

Currently there are about 300,000 landlords in New Zealand and that figure is expected to grow as the percentage of people owning their own home decreases.The New Zealand Property Investors Federation is the main body representing investors. It has 14 affiliated associations across the country and more than 3,500 members.

ANZ Economist David Drage says that property investors are highly experienced and many have been in the industry a long period of time.

"The majority of respondents have had at least six years experience as property investors."

More than 57% have been property investors for more than 10 years.

"The importance of this is that these people have been through the economic cycle and were investors in the late-1990s when returns from property were lean," Mr Drage said.

The NZPIF/ANZ survey is also a baraometer of confidence in property investment.

Mr Drage says there is still a high level of confidence in the property market despite predictions of a downturn.

The survey shows that 48.9% of respondents bought a property last year and nearly 17% had bought one this year.

Mr Drage said it appears that although the market is at a peak investors can still find good properties which are going to meet their investment criteria.

The survey also shows that 65.7% of respondents said that they intend to make further purchases this year. Just 4.1% said that they intended to reduce their portfolios.

The age of property investors is reasonably evenly spread across the age groups.

"There is a perception that most property investors are older people," Mr Paddon says. "However nearly a quarter of the respondents are under 40."

"This is a good indication that many people believe owning a property is considered a good option for preserving future wealth," Mr Paddon said.

Summary of Property Investors' Survey

The average NZ property investor has invested in property for seven years with an average of two to three investment properties. This indicates a considerable amount of experience by individuals who have ridden out the lows and highs of the property market.

The majority of investors purchase residential dwellings in the same city in which they live.

While the average age of a person investing in property is between 40 to 49 years, over 20% of respondents were aged between 30 to 39. This is an indication that many people believe owning property is essential for preserving future wealth. The under 30s age group was under represented with only 5% of respondents falling into this age category.

Investors in NZ are actively buying up properties, with up to 66% of respondents having purchased property within the last 14 months. A further 66% of respondents are actively looking to purchase more property over the next 12 months, which is indicative of their confidence in the property market and in property as an investment.

80% of respondents had a property portfolio valued at over $300,000 and 77% of respondents had over $100,000 worth of equity in their investment properties.

Despite a large amount of equity being retained in properties, New Zealand property investors have a strong DIY attitude towards investing, and prefer to undertake the majority of pre-purchase property analysis themselves.

This DIY attitude is also prevalent in regard to maintenance of their rental properties, and very few property investors use property managers or maintenance services.
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