The number of people interested in investing in residential property has fallen sharply, an annual property survey shows.

The Nielsen Real Estate Market Report, an online survey sponsored by Realestate.co.nz, found one in seven of those surveyed intended buying residential property as a future investment. That is down from one in four last year.

Specialist property lawyer and Simpson Grierson partner Greg Tower said the survey confirmed there had been a measurable decline in the number of transactions involving traditional property investors.

The survey found a 42% decline in intention to sell among holders of investment property. At the same time, the number of property investors intending to seek out private sellers rose 24%.

Nielsen Co online division research director Tony Boyte said recent events seemed to have muddied the waters as to how much prices were moving and that appeared to have caused people to put on hold plans to invest in residential property.