The changes/tweaks in Monetary/Lending Policy via the Reserve Bank are having a mixed impact.
In the main, First Home Buyers now represent the largest portion of new lending.
However, I can categorically state that (not including the clients I engage through my involvement in Property Investment Groups and hence, my client base from within that group), I have seen considerable interest and applications from new investors that are in their twenties and thirties whom are focused on building a Rental Investment Portfolio - just like it’s always been done.
They saved and/or used their Kiwisaver Withdrawals for their first home, continued to pay down lending (or gain equity as the market has increased or saved) and are now have good equity and are looking to leverage that for that first or second investment property.
So, those that were always going to be driven and focused on buying their First Home have done or are doing that. They have saved, sacrificed, not bought what they don’t need, not taken out loans and not ticked up the credit cards.
And, conversely, those that get into debt with Vehicle Loans, Personal Loans, Credit Cards and choose not to work/study extra hours and increase their earning power are still there. It’s still the same as it ever was and will always be.
The last 3-5 years have seen a clean out of the old but I can assure you, from what I see, there is a new breed of investor - a younger generation who will do a fantastic job of looking after tenants because they haven’t had the liberal rules we have enjoyed until relatively recently - they are entering the game with eyes wide open - into a new tougher regime - and, dare I say it, possibly more of a social conscience than many of those that have just exited the industry. Anyone still operating in the hope that they don’t need to take care of their customers and their assets needs to move on. Time up.
For the record, please don’t be confused between me acknowledging a tightening of the legislation and a need for better oversight of rental property conditions versus me agreeing “with and how” the changes are being made. I don’t entirely agree with how it’s being done - nor do I agree with the fairness of the governing bodies in their application of legislation and process..