After falling to a record low in terms of their percentage share of property purchases in the second quarter of last year (a touch less than 21% nationally), mortgaged multiple property owners (MPOs, including investors) have steadily returned to the market since that time. Indeed, January’s figure had climbed to about 24% – still a little below the long-term average, but nevertheless the highest figure since mid-2021, and a clear sign that investors are targeting property again. Where is the interest showing up and what’s driving it?
It’s been a pretty broad-based return to the market
Despite higher average purchase prices, Auckland always tends to have a higher share of purchases going to mortgaged MPOs than the national figure, and there’s certainly been a pick-up in interest – from lows of around 24%, debt-backed investors have recently grown their share to 26%. Tauranga and Wellington haven’t perhaps had quite the same pick-up in interest from mortgaged investors, but Hamilton has risen, along with Christchurch in particular.
Meanwhile, Dunedin has also seen strong growth. Mortgaged investors’ market share there can be a little volatile from quarter to quarter, but after troughs of less than 15% of activity in late 2023, their presence has rebounded strongly to around 23% in the past few months. Strong rental growth in Dunedin may be a factor enticing investors back, alongside higher gross yields than other key areas.
In the ‘second tier’ cities, there’s also been a decent rise in market share for mortgaged investors, with markets such as Gisborne, Napier, Hastings, New Plymouth, Queenstown, and Invercargill all becoming more popular again. Each of these areas have different merits, but certainly in the case of Gisborne, Napier, and Hastings, significant falls in property values in the past few years will...
