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CPII Survey June 2017

PRESS RELEASE

28 June 2017

Each month Crockers Property in partnership with independent market research firm Ipsos, survey Auckland property investors for their comments and thoughts on the Auckland property market. The results of the latest CPII survey (Crockers Property Investment Index) are as follows:

  • We asked investors about their perceptions towards the proposed Labour Party residential negative gearing policy. The majority of investors (68%) stated that they would make no changes to their property portfolios as a result of this proposed policy change.
  • Nearly two-thirds of investors surveyed (68%) said they would increase their rents if the policy was implemented.
  • The Auckland Rental Property Investment Index has stabilised following four consecutive months of improvement.

Investor thoughts towards the Labour Party's proposed residential rental portfolio tax reform

In May 2017, the Labour Party announced that if elected, they would phase out negative gearing over 5 years, by allowing tax deductions from investment property losses to be deducted only from housing income, not all income as is currently the rule.
The intent of this law change would be to reduce property speculation and so make housing more affordable. The additional tax revenue would be used to fund insulation and heating grants.

Impact on residential rental portfolio intentions
The majority of investors (68%) surveyed in the Crockers Property Investment Index (CPII) survey in association with IPSOS stated that they would make no changes to their property portfolios as a result of this proposed policy change. However, 15% of investors stated that they would divest, suggesting that such a policy could have small but significant effects on the New Zealand property market.

Impact on residential property prices
42% of investors feel that the proposed policy change will have no effect on property prices. However, more than one third (34%) of investors believe that property prices will decline, three times more than the proportion who feel that prices could rise as a result.

Impact on rental property rent
Nearly two-thirds (68%) of investors stated that they will increase rents to some extent if this policy was implemented, with 47% of investors planning to increase rents by more than 3%. On the other hand, 25% of investors wouldn’t plan to increase rents.

The majority of property investors would not use an insulation or heating grant
More than half of investors (56%) stated that they are not interested in using the proposed insulation or heating grant as they believe their properties are already up to an adequate standard. While 28% of investors said they are somewhat or very interested in the proposed grants.

 

Crockers Property Investment Index

This month we see expected returns flattening, leading to a reduction in planned investment property expansion. The Auckland Rental Property Investment Index has stabilised following four consecutive months of improvement. This reflects an increase in the proportion of investors planning to make no changes to their property investments, coupled with a decrease in those planning to ‘increase’ or ‘decease’ their investments.
The Auckland Rental Property Performance Index has fallen this month to its lowest point since Jul ’14. This is a result of a considerable decrease in the proportion of investors who believe their investments will perform better over the next 12 months coupled with an increase in those who believe their investments will perform ‘worse’ and ‘the same’ over the same period.

Research Details

This research, undertaken by Ipsos on behalf of Crockers, surveyed members of the Crockers Market Research subscriber’s database during June 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.

For more details, please contact:
Kim Sinclair | Marketing Manager, Crockers Property | kims@crockers.co.nz | 09 623 951
Jonathan Dodd | Research Director, IPSOS Ltd | jonathan.dodd@ipsos.com | 09 538 0500

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