Some Thoughts on Residential Investment in times of Crisis

Posted by Auckland Property Management Ltd on April 15, 2020 | Newsletter, Property Management

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Celia Burbery, Auckland Property Management Property Management General Manager shares her thoughts on residential investment in times of crisis.

We are all deep in thought about the residential investment market at the moment with the decline in demand for Airbnb, rising unemployment rates and an unprecedented lockdown.  The question is what do we as your property partners see happening in that future crystal ball?

In relationships there is a saying “the best prediction of future behaviour is past behaviour”  – that analysis I also believe to be true in the property industry. Many of us still have those scars from the hits  taken during different crises over the last 20 years but there was also and always, a recovery. I’m not blinkered or wearing rose coloured glasses however I do believe that we here in Auckland are in a better position than the regions who’s recovery may not bounce back as well or at the same pace as in the bigger cities. We are feeling positive that generally rents should hold, and as always will still be directly affected by supply and demand because that’s the way our industry has operated for decades.

So what are investors thinking?

The results of a recent investor survey* aligns with what many investors I have talked to recently are thinking and feeling…..

  • 25% are feeling confident – that there are still real transactions to be done after this.
  • 57% are feeling cautious but positive –  if the right opportunity came along,  they’d be in.
  • 18% are feeling cautious but erring on the side of caution, it would take an amazing property for them to be in.
  • 0%  – yes 0% said they were planning to get out of the residential investment market.

Our APM property managers are working hard daily with tenants and owners to ensure a sustainable longer term plan is in place rather than a knee jerk reaction,  to see everyone through until these unknown times pass.

The reality is that we can talk till the cows come home about what ‘might’ happen. What we are doing now is dealing with the daily challenges of tenants whose incomes may be affected.  We are choosing to handle each situation with compassion and common sense as this approach is the key to getting through to the next phase and beyond with tenanted properties. If you have any doubts,  please talk to your property manager, or myself to discuss events as they unfold.

 

*Survey Results Courtesy of Opes Partners Investments.

Kind regards

Celia Burbery

General Manager – Property Management
Auckland Property Management

If you have any questions about residential property management, feel free to get in touch with us via the online form below.