Auckland commercial property investors are the most positive in the country about the year ahead, a new survey shows.
Colliers International’s third-quarter 2013 commercial property investor confidence survey shows optimism levels in Auckland reaching a net positive 56%, the highest in New Zealand and the highest level for Auckland since the survey began in March 2006.
Auckland investors overtook Christchurch, which had been the most positive city for the previous two years.
Alan McMahon, national director of research and consulting, said: “Expectations of economic growth in Auckland continue to outpace the rest of the country, and business and consumer confidence are both up. Population growth forecasts are boosting the construction industry and various major transport infrastructure projects are getting under way.”
He said the survey was conducted when it looked like there was a chance of New Zealand winning the America’s Cup, which might also have improved optimism.
Christchurch was 51% net positive.
McMahon said: “The mood in Christchurch has been very upbeat about the future for some time now, which is not surprising given the lows the city has been through since the earthquakes. However we have been expecting this optimism to moderate somewhat, as plans for the rebuild become more established and some sort of normality is eventually restored. The 10% reduction in Christchurch investor confidence this quarter could be the start of this process, but investors are still very positive overall.”
The average result for New Zealand as a whole this quarter was a net positive 25%, slightly down from 26% last quarter — meaning more respondents think things will get better for commercial property investors over the next year than worse, by a margin of 25%.
The most negative city, Palmerston North, was 14% net pessimistic this quarter, while Wellington investor confidence also fell to 10% net pessimistic. “Wellington investor confidence is still being negatively influenced by earthquake strengthening concerns and uncertainty around public sector cuts,” McMahon said.
The big spread reflected the vastly different expectations of economic growth in various centres, he said.
“People’s expectations of upcoming property market conditions are based on expected future demand for property. So it only makes sense that in cities where positive macroeconomic factors create the expectation of increased demand for property, people are optimistic – and the reverse also applies in centres where economic and business growth is still some way off.”