Investors taking on more property as LVRs squeeze first-timers from market.
Westpac has changed its business model after discovering landlords are on the rise with their share of house sales up from 37 per cent a year ago to 42 per cent last month.
Sales to first-home buyers are on the decline, with their share of the market down from 19 per cent to 17 per cent as mortgage loan-to-value restrictions bite.
Ian Blair, Westpac's retail banking general manager, said the bank worked with information business CoreLogic to discover the trend and had beefed up teams dedicated to servicing landlord customers as a result.
His numbers tally with data out in July from NZIER principal economist Shamubeel Eaqub, also using CoreLogic data, to reveal that investors made up 45 per cent of the market, first-home buyers 19 per cent and movers 28 per cent.
Blair said Westpac had a new team of investment property lending specialists, and had refreshed product offerings for investors and developed an online resource centre.
That online tool has a new property investment calculator showing rent yields and capital gains in year one, as well as a forecast over a chosen period, and net cash flow position. It also includes key information, lending options, tools and resources, such as case studies and property manager checklists, Blair said.
Blair said movers were staying put and mortgage registrations for that category - people who owned or own a house and were trading up or down - have not moved.
"Movers, a segment who might normally consider moving or trading up, are staying put possibly waiting on the outcome of the elections or preferring to renovate instead," Blair said.
"In Auckland, an additional reason may be the new council valuations for all properties due out in November. Home owners are possibly sitting tight to get the new valuation before considering selling," he said.
The trend was clear - investors were filling the void left by first-home buyers who have tailed off since LVRs were introduced, Blair said. "Investors have become more dominant in the market, although there is support for first-home buyers through the Welcome Home Loan scheme. New Zealanders now have about 73 per cent of their assets in real estate, drawing warnings from the International Monetary Fund, major international credit rating agencies, Reserve Bank Governor Graeme Wheeler and the Organisation for Economic Co-operation and Development.