Podcast: How Many Properties Do NZ Investors Really Own? | Ep. 235

Posted by Ed McKnight on 05/05/20
How Many Properties Do NZ Investors Really Own 001
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Show Notes

What's Covered in the Show?

In this episode, we discuss how many properties New Zealand investors really own, and the distribution of those investors.

What we found is that in 2015:

104,357 investors owned just 1 property, which is 79.68% of all investors 22,914 investors owned between 2-5 properties, which is 17.5% of the total 2,455 investors owned between 6-20 properties, which is 1.87% of the total 457 investors owned between 21-50 properties, which is 0.35% of all investors 488 investors owned between 51-200 properties, which is 0.37% of the total, and 293 investors owned over 200 properties, which is 0.22% of all investors.

We currently have an updated Official Information Act request in with the Ministry of Business, Innovation and Employment to update these figures.

We also mention our upcoming property investment webinar, which is being held this Tuesday at 7pm. You can sign up using the previous link.

Transcript

Transcript of the Podcast


Ed McKnight:
Hello and welcome along to the Property Academy podcast. I'm your host Ed McKnight and I'm Andrew Nicol, and on the show, we're talking about how many properties do New Zealand landlords actually own. Each.

So, what we've actually done is we've gone away and got a distribution of how many landlords own how many properties. Now this comes because Andrew, as he sometimes does, calls me up and says, Ed, can you find out how many people or what proportion of landlords own five or more properties for a friend of ours who's writing a blog.

So, whenever Andrew doesn't want to find a piece of data himself, he asks me to do that. And what I've come across is, that's not said begrudgingly by the way, that's just the truth. What I came across, and this is really interesting, is an official information act request that was lodged against, I think, the equivalent of IMBY back in the day, back in 2015. It was actually, it wasn't me, and from 2015 where they've pulled out the data because initially, I was like, well, I'm not sure who's going to have this data because it's not released publicly.

So, what we'll actually do is we'll record this episode, but I'll put another official information act request to get the updated numbers, though I don't anticipate they would have changed that much.

So, let's go through this because this kind of gives us some insight about investors and out in the market there are 105,000 104,000 investors out there who own one rental property. So that's 80% of investors only own one rental property.

Now, this is important for two reasons. A, that's really interesting just to kind of know that. But also, when you're talking to people about investment, you know, just realise that 80% of the property investors, you meet only own one property. So perhaps you might like to take any out their property advice from those sorts of people with a grain of salt. And just in inquire as to, you know, the number properties that somebody owns when they're talking or giving you advice as a property investor.

Andrew does that kind of 80% or 79% line up with what you thought. Did you think that 80% of property investors would only own one property?

Andrew Nicol: Yeah, that was definitely in line with what I was thinking, but it is interesting and I've said this time and time again how everyone in New Zealand seems to be a property expert, whether or not they're own a rental property or otherwise, but then when you boil it down to of the small percentage of New Zealand that actually is a landlord, 80% of them are a landlord cause they own one other rental property or one rental property.

It's not, that's not life changing. And so that's not, they may have just become an accidental landlord with one rental property, turned their own house into a rental property. So again, it wouldn't be like Ed says, the place that I would source my advice from when I was making an investment property decision.

Ed McKnight: And that is absolutely true. I was just going to say, I have been so surprised in, sorry about the little lag. We can't wait to her in the same room together where they won't be a lag anymore. But what is really interesting is that there are about 130,000, landlords or about 131,000 landlords in New Zealand.

So many of them actually, just in people that we meet have tuned their own property into a rental property. So you may be a landlord, but it's not necessarily what you would call a strategic property investor if you've bought a house to live and turned it into a rental property because you went and bought a different house, you know, yes, you're a landlord, you're a property investor, but it's not necessarily what I would call a strategic decision.

So yes, Andrew talk to us about the next proportion. What proportion of people own two to five properties?

Andrew Nicol: So, two to five properties, where you're kind of gearing up a little bit here, the number of landlords is about 23,000 and as a percentage it's 17.5%. So, these are the people that have maybe got a few different properties, and they've actually actively become landlords and they're working towards building a portfolio.

So if you've got between two and five properties, you're in the 17.5% of investors who are between two and five, which is awesome, and I'd say that that would make up the majority of the clients that I work with. So that's really encouraging to see you know, that is a decent effort at that stage.

Certainly, a lot of my clients want to get further than that, which flows on to the next one. But if you have got between two and five properties, you're in the 17.5% of investors which is cool.

Ed McKnight: And this is amazing because one of the things that we've talked about over the last couple of episodes, we've talked about how do you go from two to five plus properties, and in our webinar we talked about how to get to six properties. Andrew gave an example.

Now just, before I reveal the percentage, if you did own six rental properties or more, and kind of follow this webinar advice, you would be among only 3,693 investors in New Zealand who own six or more properties. So less than 4,000 investors own six or more properties, which is probably fewer than I actually thought.

So, there are about 2,455 investors who own between six and 20 properties, and that's what, 1.87%. So, we're starting to get thinner and thinner, but what's interesting is that we've now got data for people who own between 21 and 50 51 and 200 and then 201 plus properties. There are 293 people who own 201 or more properties.

Now, Andrew walk me through this. Who are these 293 people and how do you get the bank to lend you this much money to be able to go and buy that many properties?

Andrew Nicol: Now, these are going to be serious investment companies, I would imagine, and they're going to be groups or syndication groups that allow you to be able to buy in that sort of number. I don't know any personal investors who have got that number of properties.

I know a lady called Liz Harrison, in Christchurch, who is a very, very good female property investor. I think she's the largest individual property investor in New Zealand female property investor in New Zealand. I don't think she's got that number of rental properties at the moment, but she has huge number.

So, my guess here is that it's property investment companies who own themselves, I can't imagine, or maybe perhaps rest homes might be, might fall into this category. I'm not sure because it's recorded off bonds. Yeah, you're a serious business if you're that, it's probably people like Bob Jones.

Ed McKnight: Oh, that's true. And, just when you were talking about bonds as well, I suppose you've probably got universities in there. So, if you're a university and you're collecting bonds from people moving into your student accommodation, and then they might all be separate as well.

So, you might have five or six different buildings that would have.200 plus apartments in them for students, they may all be treated as a separate landlord in that situation, even though it's all through the university. So that's a good point as well, and you're right about any of the bigger syndicated sort of organisations that would own a lot of property, but actually be representative of multiple shareholders and multiple investors in that situation.

I think it is kind of inspiring that not all of those, if you look at the people who own 51 plus properties, there are probably about just under 800 people or organisations that own 51 plus properties. Not all of them are going to be organisations. There are people out there, individuals who own 50 plus properties, and are really serious investors.

And just speaking for myself, I find that quite inspiring. Andrew.

Andrew Nicol: Absolutely. And I just also think that like we coach people every day to get to that six or more properties. And if you're there, you're in that top 2% of investors, which is awesome, and investors only make up, I think, around about seven or 8% of the entire New Zealand population. So, you're really doing well if you get there.

Ed McKnight: Yes. So we're going to run some more numbers around this one. As I said, we are going to put in another official information act request to update these figures and once we have them, which will probably be in about five or six weeks' time. Then we'll be able to crunch them again and we'll be able to update these for you.

So just to say, well, over the last five years, have these changed and how have they changed as New Zealand's population has increased and property investment has become even more popular, I would say over the last five years. So, we'll get those updated figures for you.

Now, please don't forget to rate, review and subscribe to the podcast. It really does help us get the message out to more people and hey, if you want to become part of that 2% and have six or more properties and live off your property portfolio, then here's what you've got to do. You've got to sign up for our webinar this Tuesday. That's going to be at 7:00 PM over 440 investors, both existing and new investors joined our webinar last week.

We actually had so many people come on the webinar it started booting some people out, I shouldn't chuckle about that, but it kind of made me feel good in a weird way. So, we've upped the number of people who can attend these as well to make sure that we're able to grow this community as well.

So, tap or swipe over that cover art. We'll put a link to that webinar where you can go sign up for that and one of our favourite parts of this actually is talking to podcast listeners cause we're chatting back and forth with you throughout the webinar. Or you can just go to Opespartners.co.nz and sign up there.

Thanks for listening to the Property Academy podcast. I'm your host Ed McKnight, and I'm Andrew Nicol, and we're going to be back again tomorrow with even more daily strategies, tactics, and insights to help you get the most out of the New Zealand property market.

Until next time.