NZ's two favourites: Rental property and the All Blacks

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Property remained the most favoured investment class in the last quarter despite property tax to be introduced in the next budget according to the ASB Investor Confidence survey.

Thursday, January 28th 2010, 6:00AM 2 Comments

by Jenha White

Rental property increased in popularity over the quarter, up 2 points with 18% of respondents rating it as offering the best return - making it the most popular investment for three quarters running. 

Bank savings accounts remained steady on 15%, while term deposits ranked third with 12%.

ASB Head of Investment Services Jonathan Beale says house prices rose over much of 2009, although rental rates remained fairly static.

"Interestingly, the steady lift in the popularity of rental property as an investment occurred even amidst public speculation that the Government may introduce legislation that could impact the relative attractiveness of rental property returns."

He says it will be interesting to see how things go in the next quarter after people have seen more information regarding possible property taxation.

"Rental property and the All Blacks seem to be the most popular things in New Zealand," he says.

Beale believes it is so popular because people have experienced property, they know it and they've had good returns from it.

New Zealand Property Investors Association vice president Andrew King says he is a little surprised at the results given the Tax Working Group recommendations, but he says people possibly think the recommendations are too radical and won't happen.

"Ï still don't think there's a lot of confidence in the financial adviser industry so when people look at where to put their money it's tried and true with property."

He says cash flow is a lot better than it has been for a while and when cash flow is good it makes it easier for investors to fund new purchases and to make the most of good property buying opportunities.

Jenha is a TPL staff reporter. jenha@tarawera.co.nz

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