Meth contamination is a big worry for landlords, especially in the Waikato, but it won't stop them buying more properties

Nearly a third of property investors have been significantly affected by loan to value ratio (LVR) mortgage lending restrictions imposed by the Reserve Bank, according to the ANZ Property Investment Survey.

The annual survey of 784 members of the NZ Property Investors' Federation found that the investment strategies of 31% of them had been affected by LVR restrictions in the last year, and nearly half of those (14%) said the the restrictions had prevented them buying additional properties.

More than half of the investors (53%) said the LVRs on their own investment portfolios had dropped in the last 12 months and only 18% had mortgage debt equivalent to more than 75% of their properties' valuations, compared with 27% in the last survey.

However two thirds of the investors said they planned on buying more properties.

The top three areas of concern were the potential for damage to their properties, regulation such as LVR restrictions and tenants not paying their rent.

The biggest single cause for concern around potential damage identified in the survey was the possibility for methamphetamine contamination of their properties.

Thirty eight per cent of the investors said they were worried about the prospect of their properties being contaminated from the production or consumption of meth on their premises.

Those concerns were highest among Waikato investors where nearly two thirds (63%) said they were concerned about meth contamination.

However that doesn't appear to have deterred Auckland investors from pouring over the Bombay Hills to buy up rental properties, with 11% of Auckland investors saying the majority of their investments were in the Waikato.

And 84% of the investors surveyed expected property values to increase by 2.5% or more in the next 12 months and 53% expected rents to increase by 2.5% or more.

Eight nine per cent of investors said they planned to keep their properties for the long term.

"Despite their concerns, a major theme of recent years remains: investors continue to see property as a long term investment," ANZ head of mortgages Glenn Stevenson said.

"They are holding on to properties and seeing significant reductions in their LVR levels, primarily through capital gain."

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