Manawatu Property Investors' Association

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LVR move worries investors

Property investors are wary about the possible impact of new loan-to-value restrictions, the latest ANZ Property Investment Survey shows.

It found that 92% of investors expect property prices to increase over the next year. The median increase expected is 4.3%.

Almost all investors expected to see an increase in prices over five years.

Risks such as tenants defaulting, properties remaining vacant and not meeting expected returns are seen as less important than in previous years. But the main risks cited were changes to regulation.

ANZ’s general manager of specialist distribution, Craig Moffatt, said investors saw their portfolios as a long-term investment. 

““Managing potential risks is always important, and the risk of interest rate increases is up from 18% last year to 28% this year... The survey was conducted just before the Reserve Bank announcement, but it had been widely signalled. What we were seeing is a high degree of uncertainty among investors with 84% saying they don’t know what it will mean for them. Only 16% thought it would impact their strategy.”

The survey showed that only 8% of investors had LVRs over 90%. Fewer than 25% had LVRs of more than 75%. One in 10 was totally debt-free.

Just over 60% planned to buy another property at some stage, and 49% planned to buy one within two years.


Tags: lvr