Investors keep their chins up
Sunday 10 October 2004
Institutional investors in New Zealand's blue-chip commercial property market remain upbeat, a survey shows.
By The LandlordThis year's Ernst & Young Real Estate Investor Survey is based on the responses of 11 unnamed institutional investors the report describes as together holding "a substantial proportion of New Zealand's property stock."
The investors were asked to indicate what annual income and total return they expected on investments for the financial year ending June 2005.
When completing the survey, investors were to assume the following investment conditions: rents at market rates, minimal vacancies, medium- to long-term leases and minimal short- to medium-term capital expenditure.
Figures generally show a continued firming of yields and total returns.
This is in spite of expectations of an imminent economic slowdown and a perceived peaking of the property market.
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Housing confidence has been dealt a hefty blow by the Covid-19 crisis with house price expectations plummeting to new lows.
Periods of house price decline are rare and "short-lived", says economist Tony Alexander, amid forecasts of a drop of 10%-15% this year.
Mortgage lending fell to its lowest level on record last month as the property market ground to a halt during the Covid-19 lockdown.