16-02-2009

 Roger Raymond, President of the Northland Property Investors' Association (NPIA) agrees that a positive mindset is essential and that the opportunities are still there. Arranging finance to reach property investment goals is becoming more difficult but he believes lenders should be willing to support those with whom they have had relationships for a number of years. NPIA members are successfully finding tenants. However, for property investors who have not been able to pay down their mortgages, it will be a tight year. Roger advises these investors to remember their wins and their property investment passion in order to keep going.

 

Sue Tierney, President of Auckland Property Investors' Association (APIA) also agrees that perception becomes reality and people can talk themselves into a recession. She thinks most APIA members are in good shape to get through 2009. However, now is a good time to restructure investment strategies. Continuing to rely on interest only loans is not a smart move in today's economic climate. She urges investors to use improved cash flow coming from lower interest rates to reduce debt and, if in a difficult situation, find a mentor who has been a property investor through many cycles and benefit from their wisdom.

 

The Manawatu Region has been somewhat insulated from the effects of the credit squeeze, according to Lance Morrison and Grant Ogilvy of the Manawatu Property Investors’ Association (MPIA). Coming from three separate sectors – primary, military and education – economic activity tends to remain at a good level. There is a glut of three bedroom houses for sale but most MPIA members are not intending to sell on this market. Some members are refinancing to improve their existing cash flow and others are looking out for those cash flow positive properties now becoming available.

 

Maree Mortimer, President of Rotorua Property Investors’ Association is optimistic about 2009. The extensions to Rotorua Airport have begun and regular trans Tasman flights are expected to be scheduled from the middle of the year. This will boost tourism and employment. With house prices and interest rates coming down, the volume of sales has been increasing and there have been more investor enquiries.

 

“Being the energy province of New Zealand, Taranaki is a progressive area,” says Bill Thomas, President of Taranaki Property Investors’ Association, “ and there are some good investment opportunities here with house prices softening and leveling out. In addition, the demand for rental properties is still good.”

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Alistair Gillespie, President of Capital Property Investors' Association, feels that it is going to be hard to predict what will happen during 2009, following last year's interesting events in the financial sector and the subsequent knock on effect into the investment markets. However, he sees that with the softening in house prices, the lowering of interest rates and the tightening of finance, residential property investors will find plenty of opportunities to increase their property folios. This is similarly true for those who are goal orientated and working to getting started in the property market. As long as there are willing and motivated sellers, Alistair will be expecting to see an increase in residential investor activity this year.  

 

The outlook is not so optimistic in Dunedin. “2009 is going to be a tough year,” says Cliff Seque, President of Otago Property Investors' Association (OPIA). He points out that at least 580 people will be made redundant from Fisher and Paykel and Cadbury and expects that there will be more redundancies as the year progresses. Real estate agents are starting to report large numbers of listings in some areas like Mosgiel. As time goes on, these homes will be discounted to sell or their owners may turn them into rentals. Cliff thinks it will be hard to find good tenants, as, although the student housing market is holding up, the general rental market is now very soft.   Overall, Cliff predicts that it will be the regions, which have the highest percentage of redundancies in relation to the local workforce, which will experience the largest drop in house prices.