Rising Property Investor Interest Sparking On Trade Me Property

Trade Me Property is seeing a rise in property investor interest on site with searches for keywords like income, home and income and rental all trending up since January.

In the year from July 2023 to July 2024, searches with keywords “income” rose 6.3 per cent, “home and income” searches rose 10.6 per cent, searches with “rental” in them were up 12.3 per cent and those for “yield” were up 8.9 per cent. Low numbers of searches for “investment property” were up 41 per cent.

Trade Me Property Customer Director Gavin Lloyd says it will be interesting to monitor market dynamics particularly in light of the legislative changes which give property investors certainty the majority of their mortgage interest as a landlord will be tax deductible, and if they have to sell an investment property after just two years, they won’t be penalised for it by the Brightline test.

“Any surge in property investor activity is important news for owner occupiers and first home buyers who have been enjoying more of the playing field to themselves these last couple of years, given government legislation adversely affecting property investors.

“Now there are more financial reasons for property investors to take a look at the market again and there are plenty of properties for sale which could work well as rentals,” he says.

Property analytics firm CoreLogic said in a report in late August they were seeing early indications that small investors, especially, were beginning to re-enter the housing market.

CoreLogic’s Head of Research Nick Goodall says it’s not surprising as the current gap between mortgage rates and rental yields closes, which reduces the cash top-up for a typical property.

“There’s reason to believe so-called “Mum and Dad investors” could become a little more prominent again next year.

“What the data tells us, is for people who own their own homes plus one other property, the conditions stack up better for them now and it makes sense for people to come out and test the market and see what’s available,” says Goodall.

Matt Ball, Advocacy Manager at the New Zealand Property Investors Federation (NZPIF) confirms the organisation is starting to see signs of investors getting ready to return to the the market.

“Interest rates are falling, banks are keener to lend, interest deductibility is returning, and the 90-day termination clause will be reintroduced so there’s a better environment for people wanting to get into the business of providing rental accommodation,” he says.

“Conditions working against investors are costs, (rates, insurance, maintenance), the fact it’s harder to find good tenants and rents are static so anyone getting into the business must ensure the numbers add up.

“We get the feeling that cashed-up investors will be first off the block, while newer investors, who are more reliant on borrowing, may wait for interest rates to fall further.”

One NZPIF Federation member, Rachel McInnes is a new Dunedin-based investor having bought two doer-uppers which had some appealing features, and then worked to improve them and make them attractive to tenants.

The property investor says with her job and doing up properties, she was working 70 hour weeks for the first seven months of 2024.

“I do all the painting, flooring, bogging and filling windows.There’s a real advantage to being a woman with DIY skills and some style ideas,” says McInnes.

Aucklander Richard Gilbert is another small investor with his wife, Samantha Hovell, and he believes this is a great time to buy. Based in Auckland, the couple have two investment properties in Manukau, two family homes with cabins and long term tenants, and a five bedroom townhouse in Birkenhead which was their first home, bought new.

“We want to pay the homes off, pay the principal off, then have an income stream for retirement and a helping hand for our children,” says Mr Gilbert.

“I would say if you’ve got the deposit and it matches the LVR, and you’ve got the finance, take your time. Never rush into a purchase.”

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