News

Colliers International’s latest quarterly commercial property confidence survey shows that overall confidence levels have dropped since the most recent survey in December, particularly in the main centres.

However, optimism continues to grow outside the main centres - in Tauranga, Nelson, Queenstown, Dunedin and Palmerston North, which are all more positive than in December 2009.

Key survey findings:

· National overall confidence levels have declined from -13% to -16%, the most negative outlook in six months. This follows the positive trend shown in the September survey and a flattening in December, both up from record lows in March.

· Confidence about the next twelve months increased in five centres and declined in six

· All three main centres decreased in confidence. The most negative place in the country is Wellington, which dropped 4% to -23%, exactly where confidence levels were six months ago

· The biggest jump in confidence was in Queenstown, from -20% to -15%

· The most positive place in the country continues to be Tauranga (+6%), the only place in the country where positivity continues to grow and optimists outnumber pessimists.

Commentary:

The service sector is fragile, with public sector employment under particular scrutiny and retailers are still finding life tough. In addition Auckland and Wellington have particular issues with their office markets. All of that points to reduced confidence in the bigger city markets.

We expect the recovery in smaller markets to continue but, like the wider economy, it will be patchy and quite slow. Investors can see the light at the end of the tunnel in every town and city, but the length of the tunnel and the speed of the train vary widely.

ENDS

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