Property investors now in 'panic buying' mode

Gary Lin says the new lending crackdown should change buyer behaviours drastically. Photo / Nick Reed

Property investors might now be in 'panic buying' mode now but all that could change soon with the new lending crackdown, one active buyer says.

Gary Lin, originally from Guangzhou but now with a portfolio of 11 properties valued at approximately $8.5 million, said appetite for Auckland places tailed off late last year following tougher new lending rules.

He now expects the same to happen again in the next few weeks.

"I would expect panic buying - the same as last year before October," he said.

Lin said he had noticed a distinctive change in behaviour over the last few months.

"Basically, everyone bought before the new rules last October, with the bright line test and the 30 per cent deposit. After that, it quietened down and by March it started to heat up again with more people bidding and higher prices," he said.

With the major banks now imposing 40 per cent deposit rules on investors in advance of Reserve Bank rules come September, Lin said he sees another major turnaround in investor buyer behaviour.

"Before the new rules were just announced, the market was pretty hot. Auction clearance rates at Barfoots are now 60 to 70 per cent again.

"I would not be surprised if people with pre-approvals at the old 30 per cent deposits will try to use that before September. But after September, the market will slow down a bit because there will be less investors," Lin said.

His interest is the market for units under $700,000 and houses under $1 million which he says are a big target for the investor segment.

I would expect panic buying - same as last year before October.

Lin, who usually attends about two Barfoot & Thompson auctions a week, said buyer behaviour was heated lately before the new much-anticipated new rules.

Lin thinks investors won't be as active after September. First home buyers might have a better change of purchasing.