House Prices

Property preferred as shares slump

Hard on the heels of a slump in the stockmarket, New Zealand's biggest fund manager is shifting money into property in the hope rising rentals will translate into better returns.

Wednesday, April 20th 2005

AMP Capital Investors, which manages more than $10 billion of funds, announced yesterday it will shift funds from local bonds into local property and remain slightly underweight in local stocks.

Many three-year property rental agreements were only now being renegotiated upwards, meaning the property market performed better at the tail end of a recovery than stocks, which tended to be more sensitive to forecasts of an economic slowdown.

"The yields are underpinned by a very firm rental environment at the moment," said AMP Capital chief investment officer Tore Hayward.

"It's much more of a late cycle investment than, say, equities."

AMP's announcement of an asset shuffle came the day after the New Zealand stockmarket's worst day in almost two years. The NZSX 50 Index bounced back 0.58 per cent yesterday to 2969.9, but remained below the 3000 mark amid fears of a global slowdown triggered by higher interest rates and sky-high oil prices.

Mr Hayward said the New Zealand economy was likely to slow down this year and expectations of slower earnings growth had already hit sharemarkets.

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Heartland Bank - Online 6.69
SBS FirstHome Combo 6.74
Wairarapa Building Society 6.95
Unity 6.99
Co-operative Bank - First Home Special 7.04
ICBC 7.05
China Construction Bank 7.09
BNZ - Classic 7.24
ASB Bank 7.24
ANZ Special 7.24
TSB Special 7.24
Unity First Home Buyer special 6.45
Heartland Bank - Online 6.45
China Construction Bank 6.75
TSB Special 6.75
ICBC 6.75
ANZ Special 6.79
ASB Bank 6.79
AIA - Go Home Loans 6.79
Kiwibank Special 6.79
BNZ - Classic 6.79
Unity 6.79
Westpac Special 6.39
China Construction Bank 6.40
ICBC 6.49
SBS Bank Special 6.55
Kiwibank Special 6.55
BNZ - Classic 6.55
Co-operative Bank - Owner Occ 6.55
ASB Bank 6.55
AIA - Go Home Loans 6.55
TSB Special 6.59
Kainga Ora 6.99
SBS FirstHome Combo 6.19
AIA - Back My Build 6.19
ANZ Blueprint to Build 7.39
Credit Union Auckland 7.70
ICBC 7.85
Heartland Bank - Online 7.99
Pepper Money Essential 8.29
Co-operative Bank - Owner Occ 8.40
Co-operative Bank - Standard 8.40
First Credit Union Standard 8.50
Kiwibank 8.50

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