New Zealand rate cuts entices property investors

17 December 2008

Property investors, primarily landlords, are returning to the New Zealand property market due to cheaper borrowing costs caused by lower interest rates, according to recent survey conducted by landlords.co.nz.

“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,” Shaun Riley, chief executive of Mike Pero Mortgages, said.

The survey found nearly two-thirds of people (550 people polled) thought rate cuts were making property investment more attractive. Only 5.1% have sold properties in the past six months.

"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," Mr Riley added.

The new National-led government will encourage more residential property investment, according to 45% of those surveyed.

A Wizard Home Loans affordability report this week showed a sharp reduction in mortgage rates drove housing to its best level of affordability in a number of years, reports The New Zealand Herald.

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