Colliers International’s latest commercial property confidence survey shows that confidence levels in Auckland and Wellington are rising sharply from the previous record lows recorded in March.
Optimism is sharply up in Auckland and Wellington for the first time since a steady downward trend began in March 2007. However, levels have held steady in Christchurch.
Although there were still more pessimists than optimists in every market, the optimists are making a comeback in the main centres:
· In Auckland there was a huge improvement in confidence, with the overall result moving from -72% in March to -45% in June, the most positive investors have been in over six months.
· Wellington investors are more optimistic than Auckland, jumping from -63% in March to -37% in June.
· Christchurch has not seen the rebound in optimism in Auckland and Wellington, recording a slightly more pessimistic result in June (-38%) than in March (-36%).
Alan McMahon, Research Director for Colliers international, said: “Auckland and Queenstown are the markets which became most over-heated in the years to 2007, so it is not surprising that they are taking longer to recover. The upswing in Auckland may well signal a turning point, but we need to see results over the next few quarters before we can draw any conclusions.”
For the first time, Colliers’ survey also covers the main regional markets where Colliers has an office, which provides real national coverage. Of the 11 areas surveyed, the most positive area is Nelson at -10%. Other centres to fare well were Bay of Plenty (-12%), Hawkes Bay (-18%) and Palmerston North (-18%).
Alan McMahon said: “Nelson and Bay of Plenty are both places where local property investors like to buy locally. Investors in these markets tend to be experienced, well-informed and conservative particularly in their approach to debt. That makes for an orderly market in comparison to say Auckland and Queenstown where there has always been more speculation.”
Colliers’ survey garnered over 3000 opinions, asking what investors and other commercial property professionals think will happen to the market in the next twelve months.
This follows recent positive consumer confidence data from Westpac, which showed that consumer confidence has moved into optimistic territory in Q2 2009 to reach its highest level in 18 months.
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Alan McMahon