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CPII Survey January 2018

PRESS RELEASE

26 January 2018

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:

  • Following the recent Coastal Flooding events in and near Auckland, several questions were asked in relation to the impact this had on investors. 32% of property investors claim that global warming and flooding has reduced their interest in buying coastal properties, whilst only 27% remain interested in buying coastal properties.
  • The Auckland Rental Property Investment Index has increased further. Reflecting an increase in the proportion of investors planning to increase the size of their property portfolio while prices stabilse, coupled with a slight decline in the proportion looking to divest.
  • The Auckland Rental Property Performance Index has recovered, due to a decrease in the proportion of investors expecting ‘worse’ returns coupled with an increase in the proportion of investors expecting ‘same’ returns.

Coastal Flooding

In response to coastal flooding in early January, questions were asked in relation to what impact this had on respondents’ attitudes towards investing in coastal residential properties.

Overall, 55% of the respondents were not impacted by the recent floods, 44% did not own any coastal properties and 1% of respondents were affected by the floods.

Despite this low level of actual impact, 32% claimed that climate change has reduced their interest in buying coastal properties, whilst just over a quarter of respondents (27%) are still interested in investing coastal properties despite recent flooding and global warming.

Crockers Property Investment Index

This month the Auckland Rental Property Investment Index has increased further. This reflects an increase in the proportion of investors planning to increase the size of their property portfolio, coupled with a slight decline in the proportion looking to divest. Reports of being a ‘buyers’ market’ are supported by this.

The Auckland Rental Property Performance Index has recovered, due to a decrease in the proportion of investors expecting ‘worse’ returns together with an increase in the proportion of investors expecting ‘same’ returns. The proportion expecting performance to get ‘better’ has decreased. Therefore we see a situation where investors are being encouraged by flattening prices.

Expected Rental Property Investment Performance – Next 12 Months

The proportion of investors expecting ‘better’ returns over the next year has declined further, while the proportion of investors expecting ‘the same’ returns has increased. Meanwhile, there has been a decrease in the number of ‘pessimistic’ investors.

When compared with smaller portfolio investors (valued at up to $1m), a greater percentage of large portfolio investors (valued at $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 further this month, coupled with an increase in the proportion of those who are planning to increase the size of their property portfolios. The proportion looking to make no changes has decreased slightly.

Larger portfolio investors were more likely than smaller portfolio investors to say they were looking to increase their rental property portfolio, although the majority across both groups were still planning to make no changes. 

Investment Likelihood

Interest in ‘other residential’ has declined this month. However, it is still by far the most popular type of property investment. Meanwhile, interest in ‘Central CBD’ apartments has increased after a dip in November and interest in ‘commercial’ property has started to recover from its lowest point last year.

Interest in rental property types was broadly consistent across larger and smaller portfolio investors, though larger portfolio investors were generally more likely to opt for ‘other residential’ rental investments.

Research Details

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

 

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