Things looking up for property investors

Tuesday 16th December 2008

The latest cut in the Official Cash Rate and the corresponding fall in home loan interest rates signal things are looking up for property investors.

A survey of more than 550 property investors, run by Mike Pero Mortgages and Landlords.co.nz, found falling interest rates are making residential property investment more attractive. The survey takes place quarterly to track how investors feel about the residential property market.

Mike Pero Mortgages chief executive Shaun Riley says the latest rate cut has certainly helped home affordability.

�It is a good time to buy, both for investors and for private buyers. House prices are cheaper than they have been for a number of years and with falling interest rates, home affordability has improved considerably over the past year.�

Nearly two-thirds of survey respondents (64%) said rate cuts were making property investment more attractive. The survey results also showed very few investors had sold properties in the past six months (5.1%), however a much bigger percentage were now looking to buy.

�The survey results showed that 20.5% of property investors expected to buy more property before March 31 next year and another 28.6% expected to buy later in 2009,� Riley says.

�But I advise these investors to seek expert advice before purchasing, as there are significant variations between lenders and their rates and conditions. We will help customers work through the options and come up with a strategy that will allow them to benefit from the falling rates or find a lender that suits their current position,� he says.

Another finding from the survey was that the new National-led government will have a positive impact on property investors and will encourage more residential property investment, according to around half of the respondents (45.7%).

The property investors surveyed said falling interest rates are positive for investors and they are also looking for house prices to continue falling.

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