\u201cIf you took your equity out and invested it in standard index funds or a managed fund, there\u2019s potential that if you pick the right one, you could do a lot better over the same period.\u201d<\/p>\n
He said many investors were increasingly interested in assets that offered some liquidity, or properties that would give more cashflow.<\/p>\n
Iswar said investors needed to think about what they wanted to achieve with any of their investments. \u201cIf you\u2019re buying property for future wealth then it might be a good thing\u2026 I\u2019m not saying property is bad. I\u2019m saying you should look at property and other asset classes at the same time, so you are diversified.\u201d<\/p>\n
ASB\u2019s investment confidence survey showed many people now expect lower returns from property investment.<\/p>\n
Investors are advised to think about what they want to achieve with any of their investments. Photo \/ 123rf<\/p>\n
A survey by economist Tony Alexander earlier in the year showed a record number of investors considering selling.<\/p>\n
Property investment coach Steve Goodey said investors were taking a different approach now the market was flat.<\/p>\n
Prices have been flat or falling in much of the country for the past three years, although Canterbury and Otago have returned to their previous peaks.<\/p>\n
\u201cFive years ago, property could do no wrong, now it\u2019s all property might be over, which is bulls***. It\u2019s just first-home buyers\u2019 turn to jump in, which is great for the average long-term investors as it takes so many properties out of the rental pool.<\/p>\n
\u201cInvestors have just flipped, they don\u2019t invest for equity at this point in the market so they invest for the other metric that makes sense, which is cashflow.\u201d<\/p>\n
He said the run-up to Christmas was likely to be a terrible time to sell a property but a good time to buy.<\/p>\n
Goodey said he was finding value in \u201cblue-collar cities\u201d such as Palmerston North and Hastings. \u201cThey haven\u2019t had the massive boom or massive bust; they tick over and do their own thing. There is a lot of interesting stuff going on, a lot of great cashflow plays. There are lots of people sitting out there with the ability to borrow but they\u2019re keeping their hands in their pockets because they\u2019re nervous.\u201d<\/p>\n
More than three-quarters of first-home purchases are standalone houses. Photo \/ 123rf<\/p>\n
Cotality chief property economist Kelvin Davidson agreed that investors seemed to be changing their approach. He said it seemed the type of properties that investors were buying was changing.<\/p>\n
In 2016, 13.8% of investor purchases were townhouses and 71.7% were houses.<\/p>\n
In 2021, that was 15.5% and 69.9% respectively.<\/p>\n
By this year, it was 66.9% and 19.4%.<\/p>\n
More than three-quarters of first-home purchases are standalone houses.<\/p>\n
\u201cIt could be an income thing or a cashflow thing\u2026 we estimate a townhouse yield right now might be 5% versus 4.5%\u2026 not a huge difference but a bit of a difference.\u201d<\/p>\n
He said historically investors had made a significant proportion of their returns from capital growth but many of the things that had driven prices up in the past, such as long-term falls in interest rates, a move to double-income households and housing supply shortages, had changed.<\/p>\n