Regulation a threat, investors say

But many said they would sell up if proposed regulations were introduced.

More than half of the respondents said government regulations and tax were their biggest worries, up from 37% two years ago.

One in three said Reserve Bank proposals that would require banks to treat investors with more than five properties as commercial customers would affect their strategy, mostly by prompting them to not buy new properties or to sell. Many were also concerned at the proposal for a warrant of fitness scheme for rental properties. 

The impact of interest rate volatility was cited by one in three as their greatest concern.

But investors said they still expected property values to increase by 4.8% and rents by 2.8% over the next year.

The proportion of respondents who were full-time investors had grown significantly. Just over a quarter of respondents owned seven or more investment properties, a figure that has doubled over the past four years.

ANZ head of mortgages Sarah Berry said investors saw property as an investment for the long term. "The trend of holding on to properties and reducing debt gearing has continued," she said. "Twice as many investors have decreased their leverage ratios over the last year than increased them. While rising property values have contributed to this, it appears most investors are being responsible about gearing their portfolios."

But she said a number did not fully understand a recent significant change in the way insurance policies work. "One area of concern is that one in five investors have not fully got to grips with insurers' move to sum insured. As a result, most of these investors are accepting their insurers' default value, meaning they could face a big loss due to underinsurance in the event of a disaster."