Rent optimism trumps tax changes to spark investor activity

BNZ economist Tony Alexander said the latest survey revealed a lift in the number of agents feeling there are more investors in the marketplace.

"This is an important development in the context of the previous eight surveys when interest from investors was not seen to be changing," he said.

"The increasing attention being given in the media to rental accommodation shortages and rising rents may be spurring investors back into action after retreating in the face of taxation policy changes."

The survey found investors were especially active in Manukau City, where a net 52.6% of licensed real estate agents reported investor buying activity.

Other areas to see large numbers of agents reporting investor buying included North Shore City (50%), Dunedin City/Otago/Manawatu/Wanganui (40%) and Waitakere City (37.5%).

The survey also revealed the stark difference in investor activity between Auckland and Wellington, with a net 32.4% of Auckland City agents reporting investor buying activity against a net 11.1% for Wellington/Porirua/Hutt Valley.

Alexander also highlighted Christchurch for "attracting little interest from investors," with a net -12.5% of agents seeing investors buying in Christchurch City.

Overall the survey revealed a sharp turn for the better in the residential housing market.

"Each of our eight major measures of housing market strength has risen over the past month to show a residential real estate market attracting more interest from investors, even more first home buyers appearing, buyers becoming more motivated than sellers, and prices more strongly perceived to be rising," said Alexander.

Included in the survey's positive results was an increased number of agents believing prices are rising (net 24% against 10% in December) and a sharp rise in agents seeing increased open home visits (49% against 0%).