Investor confidence remains high across most of NZ

The new research reveals Queenstown took out the top spot in both commercial and residential investor confidence at 64 and 74% respectively, closely followed by Hamilton (59%), Tauranga/Mt Maunganui (56%), and Auckland and Nelson (43%).

But the research, which tracks sentiment in the commercial and residential property markets and was conducted by the Colliers International Research and Consultancy team this month, also reveals investors remaining optimistic about the Wellington market and more negative about Christchurch.

Confidence is high in the Wellington residential market, at 51 per cent, up from 28 per cent in December 2016. However, this is still lower than the pre-quake high of 63 per cent in September 2016. The Wellington commercial property market has also grown despite November’s magnitude 7.8 earthquake, which reduced available office space by 7 per cent. Overall confidence is at 29 per cent, up from 22 per cent in Q4 2016.

Meanwhile the Christchurch residential market has dipped, with confidence down 14 points to 0% – meaning respondents are evenly split on whether the median price will go up or down in the next 12 months, while its investor confidence in the commercial market has also dipped to its lowest point since Q1 2011, which coincided with the February 2011 earthquake. Confidence is at -2%, down from 15% in the last quarter.

Colliers International Research and Consulting National Director Alan McMahon says while there has been a dip in commercial investor confidence, the 24 per cent net positive result means a significant majority of those who think the market will change are optimistic.

“New Zealand market fundamentals are sound, with demand for offices, shops, and industrial property remaining steady to strong across the country,” he says.

“Centres with good growth in resident or visitor numbers, which boosts demand for all property types, tend to have higher confidence.”

Commenting on Hamilton's performance, with residential confidence at 59% and commercial at 41%, McMahon says, “We’ve noticed the pace has eased marginally from the record levels we experienced in 2016. Our feeling is that bank-imposed lending restrictions are behind a large portion of this easing.

“However, prime investment properties remain unaffected by this slight easing. We’re also particularly confident about land and development orientated projects.”

The Tauranga/Mt Maunganui commercial market, which is the second highest in the country at 56 per cent, behind only Queenstown, saw results drop from 65 per cent in the last quarter. And its residential market also remains strong, with net confidence at 56 per cent, putting it in third place.

“It’s indicative of the continued population growth we are experiencing, and the growth in all sectors of the market to cater for these new residents moving to our city,” says Colliers International Tauranga Director Simon Clark.

Confidence in the Napier/Hastings commercial property market is at 13 per cent, up 1 percentage point from the last quarter. Confidence in the residential property market is at 41%, up from 38 percent in Q4 2016.