CPII Survey February 2018
26 February 2018
Crockers Property management has announced the latest results of the monthly survey of Auckland property investors it conducts in partnership with independent market research firm Ipsos.
- Despite anecdotal evidence otherwise, there appears to be little evidence that a large number of investors are leaving their rental properties untenanted to take advantage solely of capital gains. Only 3% of respondents have left their property untenanted.
- The Auckland Rental Property Investment Index has increased substantially this month, reflecting a rise in the proportion of investors planning to increase the size of their property portfolio, coupled with a substantial decline in the proportion looking to divest.
- The median sales price for Auckland residential properties experienced its normal small decrease in the summer months, falling from $855,000 in December 2017 to $800,000 in January 2018.
Untenanted Rental Properties
There has been some recent anecdotal evidence of Auckland investment properties being left untenanted or used for services like AirB&B, with property owners coming under criticism for contributing to the rental housing shortage as a result. This month, we asked property investors why they have left their rental property untenanted if they have done so.
We found that the majority of respondents had not left any rental properties untenanted, although it should be noted that as this sample is skewed towards users of Crockers that the reported incidence of untenanted properties is probably lower than in reality.
Overall a small percentage of investors have left their rental properties untenanted due to capital gains, suggesting that investors see more value in utilising rental properties than leaving them untenanted. Interestingly, large investors were more likely to say that they haven’t left their rental property untenanted than small investors. However, all and all, investors believe that there is far more value in utilising their rental property.
Crockers Property Investment Index
This month the Auckland Rental Property Investment Index has increased further. This is largely due to a substantial decrease in the proportion of people looking to divest this month, coupled with a rise in the proportion of investors planning to increase the size of their property portfolio.
The Auckland Rental Property Performance Index has increased this month, due to a decrease in the proportion of investors expecting ‘worse’ returns. This is coupled with a significant number of investors expecting rental property performance to ‘get better’.
Expected Rental Property Investment Performance – Next 12 Months
The proportion of investors expecting ‘better’ returns over the next year has increased this month after a decline in January. The proportion of investors expecting ‘the same’ returns has decreased. Meanwhile, there has been a further decrease in the number of ‘pessimistic’ investors this month.
When compared with larger-portfolio investors (valued at $1m+), a greater percentage of small-portfolio investors (valued at up to $1m) believe that the expected rental property investment will ‘remain the same’.
Planned Rental Property Investment Changes – Next 12 Months
The proportion of investors planning to divest has decreased this month, coupled with a rise in the proportion of those who are planning to increase the size of their property portfolios. The proportion looking to make no changes has increased slightly.
Larger-portfolio investors were more likely than smaller-portfolio investors to say they were looking to make no changes to their rental property portfolio. However, the majority of respondents were likely to make no changes to their rental property portfolio.
Auckland Sales & Rental Update
The median sales price for Auckland residential properties has experienced a decrease over the summer months, from $855,000 in December to $800,000 in January. This decrease is seen on an annual basis. Last summer there was a decrease from $840,000 in December to $805,000 in January. Meanwhile, sales volume decreased from 1,782 to 1,353. Similar decreases in sales volume also take place during this period annually.
This research, undertaken by Ipsos on behalf of Crockers, surveyed members of the Crockers Market Research subscriber’s database during March 2017. Respondents included property owners, residential and commercial landlords, property managers, estate agents and tenants. This is an ongoing series of monthly surveys, delivering a regular barometer of property investors’ confidence in the Auckland market.