News

September monthly report includes our regular quarterly updates of the rental and capital indices. In general we are still seeing easing of rental and capital values, some declines slowing and others gathering pace. Sometimes evidence of rental changes in particular take time to show. Retailers for example have been struggling in the face of declining retail sales over the last 18 months but the evidence of the effect of that on new leases is only coming through now. Property is a lag indicator which explains why after a period of resilience the prime CBD Auckland rental index has declined markedly in the last six months.

So why are retail investors increasingly confident, moving up by in the three main cities on average 38% in the last six months. The answer is in the overall result rather than the scale of the improvement. Even now, after that leap in confidence, the majority of investors think rents and capital values will reduce in the next twelve months. There is a danger that in celebrating the news that the rate of decline in various indicators is slowing, we interpret this to mean that everything in the garden is rosy. Unfortunately it’s not – it’s just that an increasing number of the legendary green shoots have been spotted.

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