Latest ANZ residential property survey finds sharp spike in concern over meth contamination and over LVR restrictions

Property investors have got a lot more worried about meth contamination and the impacts of LVR restrictions in the past year, according to the latest ANZ Residential Property Survey.

The single biggest concern for investors is meth contamination with 48% of investors viewing this as a risk, up 10% from 2016.

The biggest regulatory concern is LVRs. The report is available here.

Some 47% of investors say that the limits on high loan-to-value ratio lending have significantly impacted their strategy in the last 12 months. This is a significant increase on 2016 when 31% of investors felt they had been impacted (and only 16% in 2015).

The survey also found that property Investors are expecting slower growth in asset prices and rental income than a year ago, but remain confident in the future of the sector.

The survey found that only 3% of investors expect asset prices to increase in the 11% to 20% range, compared to 19% of investors in 2016.

Those who expect zero growth over the next year has risen from 3% in 2016 to 13% from the 2015 survey. Over five years, however, 74% of investors expect positive changes in property values.

Rental expectations have also reduced. Respondents across most of the country expect rental income to increase or hold steady over the next year (92%), but the percentage of investors expecting zero growth in the short term has risen from 10% in 2016 to 19%.

“The 2017 ANZ Residential Property Survey results suggest that an inflection point has been reached in the market,” said ANZ Head of Mortgages Glenn Stevenson.

“While most investors continue to expect positive changes in property values over the short and medium term, and in rental income (particularly over the medium term), expectations of growth have moderated considerably since last year’s survey.

“Despite this, the survey reveals investors remain strongly committed to the sector.”

This confidence has seen almost 70% of respondents indicating they would buy again.

“Off the back of a strong housing market, many of these investors have been delivered a free kick in terms of improved LVR positions from asset price increases,” Mr Stevenson said. “This will have created potential room for them to consider buying further property in the future.”

2017 ANZ Property Investment Survey – key findings

►3% of investors expect asset prices to increase in the 11% to 20% range, compared to 19 of investors in 2016.

►The single biggest concern for investors is meth contamination with 48% of investors viewing this as a risk, up 10% from 2016.

►Loan-to-value ratios are the biggest regulatory concerns for investors.

►20% of investors have changed strategy in the previous 12 months, with 25% more aggressive and 35% more conservative.

►61% of Auckland investors plan to purchase again within the next two years. This is the highest of all the regions.

►47% of investors say that the limits on high loan-to-value ratio lending have significantly impacted their strategy in the last 12 months. This is a significant increase on 2016 when 31% of investors felt they had been impacted (and only 16% in 2015).

The annual ANZ Property Investment Survey is run in conjunction with the NZ Property Investors’ Federation. The survey involved 784 online interviews with property investors throughout New Zealand. The survey was open for responses from 7 - 27 August 2017.

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13 Comments

I'd be interested to know the difference and stats between "house was used as a meth lab" and "someone smoked p at a house party". I suspect there's a lot of meth testing companies "decontaminating" properties and making cash hand over fist based on fear and questionable positive results.

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Ha ha, genuinely laughing at the 3% of investors who expect prices to increase in the 11%-20% range. Talk about delusional!! I wish there were derivatives for house prices so I could sell today plus 10% options for a year out to those people and take them to the cleaners. Those premiums would set me up nicely to profit from the coming fall.

If you think we'll touch the March 17 high again anytime before 2019 then you're dreaming.

Right now nobody knows what prices will do in a years time.
The only point of doing a survey is to be able to predict what investors may do in the short term.
Investors will be hanging on all the words that commentators make and probably agree with them and will parrot those views to their own families as justification for doing what they plan to do.
Publishing the results of this survey will provide another feedback loop to the investors to reinforce their group think views.

Drug taking certainly seems to be directly proportional to poverty. One may ask who are a large component of creating such poverty. Thus it is wonderfully ironic that housing investors may be burnt.

Or that's who's a) checked; and b) caught. There's just as much drug use in the upper echelons, but nobody's checking privately-owned places in remmers, and they're more likely to slide off into rehab and avoid jail. Also, importing and selling drugs is directly proportional to having large amounts of dirty money to launder through real estate.

Indeed some of the biggest meth sellers in Auckland are using millionaire style homes like those in the North Shore. There is a lot of money to be made and it needs to be laundered somewhere, might as well make some un-taxed capital gains while importing & selling drugs. It just makes more business sense. Got a bit of a laugh at the sleepy gentrified neighbourhoods having huge drug deals by the local supermarkets & malls, it is exactly where you would expect an importer with a few bags would not stand out. Although the usual crowd is more grey haired than most so they would not expect to look for dealers & buyers in their neighborhood either, well not if they were over 25. Too easy.

Maybe we should start meth testing used cars. Now that will cause a few headaches!

Make meth testing part of the WOF requirements.

Is this article a reflection of investor wishes, dreams and hopes bundled together by ANZ to convince the masses that it's different this time? Just lay your fears aside, move with the debt driven specuvestor herd and she'll be right mate! NOT! If the herd think positive returns are expected to continue forever then meth decontamination costs are pale by comparison - no need for sleepless nights - right? UH-HUH

Won't be "different this time", as per last 30 years values will be down up to 10%, then stagnate for 3-5 years and start climbing again to new highs

"Property investors have got a lot more worried about meth contamination and the impacts of LVR restrictions in the past year, according to the latest ANZ Residential Property Survey."

Cry me a river.

Meth test on properties is over rated and a money grabbing scam as most people starting to realise. (Except for real "p" labs of course.) If you worry about recreational p use contaminating a house on the walls, ceilings ..etc., your time will be better spent worrying about fleas, pests and mouldy houses. Contractors often reuse their painting equipments too, therefore houses they paint must all been contaminated.
Best start testing second hand cars too! Cancel your holiday hotels and motels cos they are all contaminated...?

Why aren't we testing politicians for drugs / intoxication on the job?

They're receiving large amounts of taxpayer money, and it should be ensured that they are fit on the job.