The February 2021 survey, which gathers the views of licensed real estate agents countrywide, revealed that fear of missing out (FOMO) was behind the surge in house sales, and that 31% of real estate agents were reporting an increase in investor activity.

This needs to be put into context, however: the figure of 31% is down from a peak of 59% in November and 45% in December.

“This is a greater easing off of market presence than for first home buyers and that is likely to partly be because of the extra tightening of minimum deposit requirements for investors by one bank. But a key factor may well be reduced hopes of finding a bargain,” says Alexander.

Only 2% of real estate agents say they are seeing fewer investors selling their properties.

“This is the smallest result on record for this measure and it will be very interesting to see if it changes much in the next few months. If it does then we will probably be able to interpret that as a sign that some investors are looking to take profits on their purchases – whether they be recent or of many years ago,”

Alexander continues. “There is also potential for this measure to eventually give a strong signal of investor capitulation in their price expectations.”

The report also reveals that investor hopes of finding a bargain have fallen substantially during the period of our monthly survey, with only 18% of agents reporting that this is a key factor. “In contrast, there has been a rise in the proportion of agents noting expectations of price rises amongst investors to 38% in December and 36% this month from just 6% in June.”

Alexander continues by saying that interest rates can consistently be considered the most important factor influencing investor purchase decisions, and there is an upward trend in the proportion of investors viewed as positioning themselves for retirement.

“This is one way in which the Government faces a challenge should it attempt measures which reduce returns to investors,” says Alexander. ■