CPII Survey March 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.
- Over half of respondents believe that the governments Kiwibuild programme will have little or no effect. Most believing that the key issue is Auckland’s undersupply of housing is so large that it will take more than three years to resolve the current affordability issues.
- Investors believe that the biggest current influence on rents in Auckland will be an insufficient rate of new houses being built.
- This month the Auckland Rental Property Investment Index has decreased, for the first time since September 2017. This is largely due to a substantial increase in the proportion of people looking to divest this month.
This month, Gareth Kiernan, Chief Forecaster at Infometrics, asked Auckland property investors for their opinions via the Crockers CPII survey. Kiernan found widespread scepticism that the government’s Kiwibuild programme will have much effect on affordability in Auckland within the next three years, with 57% of all respondents to the CPII survey stating that it will have little or no effect.
More than half of those respondents expecting little effect from the programme cited the region’s massive undersupply of housing as the factor that would prevent Kiwibuild solving the affordability problems.
The biggest current influence on rents in Auckland
Infometrics also used the Crockers CPII survey to ask what factor investors saw as being the biggest current influence on rents in Auckland. There was little agreement among respondents, with the most popular reason – an insufficient rate of new house building – attracting just 28% of responses.
The next two most popular reasons were “loan-to-value restrictions and a lack of housing affordability keeping people renting rather than owning their own home” (20% of respondents) and “fewer rental properties available to let due to investors exiting the market” (17% of respondents).
Crockers Property Investment Index
Auckland Rental Property Performance Index
This month the Auckland Rental Property Investment Index has decreased, for the first time since September 2017. This is largely due to a substantial increase in the proportion of people looking to divest this month, coupled with a decrease in the proportion of investors planning to make no changes to their rental property portfolio.
The Auckland Rental Property Performance Index has also decreased this month, the first decrease since November 2017. This is due to an increase in the proportion of investors expecting ‘worse’ returns, coupled with a drop in the number of investors expecting the same returns.
Expected Rental Property Investment Performance – Next 12 Months
The proportion of investors expecting ‘better’ returns over the next year has increased only slightly this month after a large increase in February. The proportion of investors expecting ‘the same’ returns has continued to decrease. Meanwhile, there has been a notable increase 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’, whilst a greater proportion of large investors believed that rental property investment performance would get ‘worse’.
Planned Rental Property Investment Changes – Next 12 Months
The proportion of investors planning to divest has increased this month, whilst the number of investors looking to increase the size of their Auckland property portfolio has continued to increase. This marks a continued increase since October 2017. The proportion looking to make no changes has decreased this month
This month there has been a large decline in those interested in ‘other’ residential property. This was complemented by an increase in the other three property types (CBD apartment, apartment, commercial).
Small investors (valued at up to $1m), were more likely to show interest in CBD apartments, whereas large investors (valued at $1m+) were more likely to show interest in other residential properties.