Until the global recession, real estate was seen by many as a sure bet: prices for most properties were always expected to go up, prompting many people to view the sector as an investment guaranteed to pay off. The events of the past 18 months have changed that perception, and for the first time in several years, the number of New Zealanders interested in investing in residential property has declined significantly, according to the annual Nielsen Real Estate Report, an online survey sponsored by Realestate.co.nz.
One in seven people surveyed said they intended on buying residential property as an investment – a sharp drop from the one in four who indicated the same desire a year ago. Additionally, 42% said they had no intention of selling the properties they already own.
The challenging market conditions and general uncertainty about the economy are factors that have been circling the industry for a while. However, Nielsen’s survey represents the first published data since changes to tax laws regarding property investment were announced earlier this year.
“The property boom made it easier for people to predict the market trends. But recent events seem to have muddied the waters over how much, up or down, price has moved. From our research, this appears to have caused people to put on hold plans to invest in residential property,” said Tony Boyte, Research Director for the Nielsen Company’s Online Division in New Zealand.