Investors losing faith in property
Only about one in 10 investors now think rental properties are the way to go.
New Zealanders have become increasingly concerned about the impact of local political uncertainty on property investments, according to a recent survey by ASB. A record 40% of respondents expressed very serious concerns about the effect of political instability on their investments, while 46% were simply concerned. Over half of the participants also expressed worries about global geopolitical and economic factors.
People were most optimistic about managed investments, followed by their own homes and KiwiSaver schemes. Just 10% believed rental properties offered the best returns, a figure near a record low.
ASB senior economist Chris Tennent-Brown attributed the decline in confidence to the flat property market and several policy proposals that could affect the market. These include removing interest deductibility for properties and introducing a land tax. He noted that while the status quo might not change, the various policy proposals generate a sense of uncertainty.
Investor confidence has dropped by 5 percentage points to a net 1% overall, primarily due to concerns about offshore events. Locally, people are most concerned about the potential for change amidst numerous policy proposals. However, Tennent-Brown emphasized that many investors are not altering their investment strategies in response to these concerns, which he deemed sensible.
He encouraged people to continue utilizing KiwiSaver, focus on the right fund, and maintain a long-term perspective despite the political uncertainty.
Written by urgent.news from RNZ Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
