News

Colliers International has just released their September commercial property Research Report for New Zealand and according to Alan McMahon, Director of research and consultancy at Colliers International, there’s never been a better time to be a small remote country.

Most of the time the tyranny of distance works against us. Our location and the small size of our economy means we can’t create the scale of investment opportunity, or the liquidity, needed to attract the attention of the wealthiest funds or their attendant investment bankers. The size and relative simplicity of our financial systems have offered some measure of shelter from the financial storms raging in Europe and the US. However we shouldn’t kid ourselves into thinking that somehow makes us more financially prudent than our counterparts in larger markets. Yes, our banks have lent conservatively on residential mortgages, but some investors, developers and secondary financiers have exhibited an appetite for risk-taking and borrowing that would make even Wall Street blush. In commercial property terms some perhaps lost sight of the cyclical nature of the market. What appears to be a rapid falling of the OCR, if combined with equally rapid falls in interest rates overseas and a US government rescue package, may turn the local property cycle up more quickly than looked likely a couple of weeks ago.

Print this article or Email to a friend