Nearly half of property investors think prices will stagnate or fall and many are looking to diversify away from property, an industry survey shows.
However, nearly 90 per cent still expected to buy another rental property in the next five years, the ANZ-Property Investors Federation survey said.
More than half of the 378 respondents planned to invest in other areas and nearly half had added to their portfolios in the past year.
'The market looks to be, between the lines, taking a little bit of heed of the Reserve Bank's warnings,' said ANZ acting chief economist Cameron Bagrie.
Investors were not purely looking for the speculative element of property, they were there for the long haul, and the diversification message was coming through, he said.
Just 1 per cent of investors expected prices to keep increasing at the same rate as in the past two years, while 40 per cent thought prices would stagnate or fall.
It was 'quite stunning' that nearly half expected prices could fall, and yet nearly all investors would buy more property.
Mr Bagrie said there was obviously 'an awful lot' of cash floating around New Zealand.
Newcomers to property investment were concerned that prices could fall and were worried about the quality of the tenants they might attract.
In the longer term, investors were more concerned about lower rental yields, though about a quarter said they had no concerns with their property portfolio.
The median value of property portfolios was $900,000 – up from $860,000 last year – producing a median income of $47,000 a year from 3.3 properties, $2000 higher.
Median total equity of $405,000 was $10,000 up on last year.
Federation president Craig Paddon said the survey showed there was continuing confidence in property as a long-term investment.
Many saw property as providing long-term income after debt was repaid, with capital gains a secondary benefit.
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