It won’t come as a surprise to anybody in the property industry that confidence in the commercial sector has plummeted further. Retail property is looking the most pessimistic, despite offering the best investment returns historically.
Colliers research reveals confidence is at the lowest level since the surveying began.
Research shows that Aucklanders hold a more miserable perspective than Wellington counterparts, with a 10% more positive outlook in the capital.
Christchurch residents are by far the most relaxed about commercial property, with over 50% more optimism than Auckland.
Colliers’ thirteenth quarterly survey looked at the confidence levels in the office, industrial and retail sectors.
Respondents were asked about their thoughts on whether these three key sectors will improve for property investors over the next twelve months.
Confidence in Auckland office space is suffering the most, at -74.2% compared with -56.5% in Wellington, and Christchurch at -22.5%. Auckland has higher one year investment returns on office properties than Wellington, but weaker returns for five and ten year terms.
“The continuing decline in office sector optimism may reflect a growing realisation that businesses which occupy offices are now subject to the same business pressures as retailers and industrial property users,” Colliers International research director Alan McMahon says.
Retail is looking the lowest at the moment, with -79.7 confidence in Auckland, -74.2 in Wellington and -56.6% in Christchurch.
“Increased saving by households in the tougher financial climate is putting downward pressure on consumer spending,” Mr McMahon says.
“Given the state of retail sales, especially those categories connected to the household sector such as appliances and furniture where margins are under pressure, it is not surprising that retail property investors are pessimistic about the future outlook,” says Mr McMahon.
Industrial property isn’t looking too positive either, at -61.5% in Auckland, -56.9 in Wellington and -28.8 in Christchurch.
“All sectors are slightly more optimistic compared with Auckland,” says McMahon.
“The most optimistic group in the country continued to be office investors in Christchurch, recording a negative 22.5% slightly up from December 2008 survey,” says Mr McMahon.
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Alan McMahon