Marlborough Property Investors' Association

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NZPIF Conference '12 Report

This years NZPIF conference in Hamilton was another major success. Attendees experienced a full weekend of devouring property related information plus sharing war and successes stories with other attendees. The mood was buoyant with many attendees looking to take advantage of market conditions.

Massey University's Home Affordability Study was released just before the conference and was one aspect that showed encouragement for the property sector. The survey showed that affordability improved by 2.8% over the last quarter, despite the national median house price increasing by $1,000.

The improvement in affordability resulted from an increase in incomes and a decrease in mortgage interest rates from an average 5.99% to 5.84%. This was more than enough to offset higher property prices.

The prospect of low interest rates continuing for some time was also a welcome aspect for many at the conference. Combined with a positive outlook for property prices, low interest rates were encouraging many attendees to purchase more rental property. Low interest rates were also benefiting investors who were looking to make an income from existing properties rather than purchasing more. Many I spoke to were preparing to end working for a living and were using low interest rates to accelerate debt repayment.

This seemed especially true of attendees from provincial areas of New Zealand. While the Auckland situation of low new building levels and stronger population growth was having a positive effect on property prices in many Auckland areas, this could not be said for many provincial towns.

Rental price movements are an aspect that differs around the country. Looking at rental prices and the number of rental properties available to let, Auckland and Canterbury have been the standout performers over the last three years, increasing around 12% to 14%. Listings for rental property to let in Christchurch is down 49% over its three year average. The number of lettings is also down in many parts of Auckland.

Rental prices in other parts of the country are not doing so well, particularly the Wellington area, Tauranga and Waikato. The number of properties available to let in Wellington is significantly above average at present. Dunedin, Nelson, Wanganui and Palmerston North also have a high number of properties to let, although this may be due to more people using Trade Me as a promotional tool.

Although it is likely that the positive Auckland market will move across the rest of New Zealand over time, many investors’ were not waiting for the market to improve their investments. Many attendees were discussing ways to proactively increase the rental prices and capital value of their rental properties.

In addition to the information gleamed from the conference speakers, many attendees gain just as much from talking to other attendees’ in-between sessions and at the functions. This is very similar to Property Investor Association meetings around the country, where many ideas are shared over a drink after the main speaker has finished.

I’m certain that all those who attended the Hamilton Conference came away inspired with a list full of new ideas for how to improve their property business. 

Tags: federation reports