CPII Survey April 2017
27 April 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:
- Auckland rents are too low? Landlords are almost three times as likely to feel that Auckland rental prices are below a fair price, than they are to feel that prices are above a fair price (34% compared to 13% respectively)
- Rents set to rise: Over half (57%) of the landlords interviewed are planning to increase rents in the next 6 months, most anticipating an increase of 1-2%.
- The Auckland Rental Property Investment Index has improved for the third consecutive month. The majority of investors still plan to make no changes to their portfolios, however there has been increase in the smaller proportion of investors who plans to increase their property investments along with a slight decrease in those planning to divest, leaving a net gain.
Review of rental prices
An increase of investors surveyed in the latest Crockers CPII survey in association with IPSOS, feel that rents are ‘below a fair price’ increasing from 30% in October 2015 to 34% on April 2017. Mirroring this, those feeling that rents are above a fair price have increased from 9% to 13% in the same period, indicating a division in opinions. Increases in costs associated with the rental property – rates, insurance and maintenance, are likely contributors to a decision to increase rents.
Planned rental price increases
Over half of the investors interviewed are planning to increase rents in the next 6 months (57%, up 11 points from Sep ’16). Most of those planning to increase rents are anticipating an increase of 1-2%.
Factors that would influence an increase in rent
A number of factors come into play when considering rental increases. An increase in local rates remains the most likely to cause an increase in rents (65%, down 2 points), but other costs like property maintenance and insurance costs continue to play a part. One factor which has had the biggest increase as a likely influence to increase rents is an increase in interest rates (50%, up 18 points) compared to last year. If landlords are going to be hit by the banks, they are looking to pass those costs onto their tenants.
Crockers Property Investment Index
This month the Auckland Rental Property Investment Index has improved for the third consecutive month. The majority of investors still plan to make no changes to their portfolios, however there has been increase in the proportion of investors who plan to increase their property investments along with a slight decrease in those planning to divest, leaving a net gain. The Auckland Rental Property Performance Index has eased slightly this month. This softening is due to a slight decrease in the proportion of investors who believe their property investments will perform better over the next 12 months coupled with an increase in the proportion of those who believe their investments will perform the same.
Planned Rental Property Investment Changes – Next 12 Months
The proportion of investors looking to increase their property investments over the next 12 months has increased this month, indicating that while no dramatic increases in return are predicted, around a fifth are still intending to enlarge their portfolio.
This research, undertaken by Ipsos on behalf of Crockers, surveyed members of the Crockers Market Research subscriber’s database during April 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
firstname.lastname@example.org | 09 623 9515
Jonathan Dodd | Research Director, IPSOS Ltd
email@example.com | 09 538 0500