Investor confidence in New Zealand’s industrial real estate market is increasing across all the main centres, while sentiment in the office, retail and residential market is dipping according to a quarterly survey.
Colliers International research and consulting national director Alan McMahon says the industrial market is particularly buoyant in Auckland, where confidence increased to 60% in the June 2017 quarter.
“This level of positivity reflects Auckland’s record low industrial vacancy rate, which fell recently to 2.1% – the lowest point since our records began more than 20 years ago,” says Mahon.
Colliers International’s latest quarterly survey is showing confidence in the overall commercial property market has fallen slightly to 22%, down from 24% the previous quarter.
Faith in the residential real estate market has dropped to 32%, down from 41%.
Industrial was the only sector to make gains, with confidence up by between two to three percentage points in the three most important centres of Auckland, Wellington and Christchurch.
The survey found confidence in the office and retail markets fell in all three main centres.
The top four commercial markets for investor confidence were Queenstown (66%), Tauranga/Mount Maunganui (55%), Auckland (41%) and Hamilton (28%) for the fourth quarter running.
In Wellington, overall confidence in the commercial market dipped to 24%, down from 29% in the previous quarter.
“One surprising result is confidence in Wellington’s retail sector, which has fallen from 17% to 5% – the lowest in two years,” says McMahon.
“The dip comes despite record low retail vacancies in Wellington, driven in part by a flurry of new retail openings. We expect a recovery from this level over the balance of the year,” he says.
McMahon says the residential outlook remains active across New Zealand, despite all regions experiencing a slight decline.
“The dip is likely due to increasing interest rates and house price growth falling nationally. However, national sentiment remains upbeat, with almost all centres reporting a positive result,” says McMahon.
The top three residential markets remain unchanged from the last quarter.
Queenstown is in the lead at 68%, followed by Tauranga/Mount Maunganui (51%) and Hamilton (46%).
The surveys, which track sentiment in the commercial and residential property markets, were carried out by the Colliers International Research and Consultancy team in June.
The commercial survey was based on 2,146 responses while the residential survey drew on 11,290 responses.
