Residential market ignores election jitters


Confidence in New Zealand’s residential property market is showing no signs of pre-election jitters, a new research survey shows.

Colliers International’s latest quarterly Residential Property Market Outlook Survey found sentiment in the residential market is little changed from the previous quarter.

A net positive 31 per cent of respondents expect median house prices to increase over the next 12 months, which is only a slight reduction from 32 per cent the previous quarter.

Colliers International Research and Consulting National Director Alan McMahon says the survey’s timing suggests the possibility of a capital gains tax appears not to have affected sentiment in the residential market.

The survey opened on September 4 and closed on September 12 – the latter date being two days before the Labour Party announced the recommendations of its Tax Working Group would not be implemented until after the 2020 election.

“Uncertainty ahead of this weekend’s general election doesn’t appear to have had an impact on the survey’s results,” McMahon says.

“Indeed, our survey found five out of 12 regions recorded an increase in market sentiment. This is a positive result considering all regions experienced a decline last quarter.”

In Auckland, positive sentiment increased across all residential categories except for existing apartments, signalling increased confidence in new apartments, and both new and existing terraced and standalone houses.

Auckland’s overall sentiment increased to a net positive 29 per cent, up from 24 per cent the previous quarter.

Sentiment in Wellington’s residential market has dipped to a net positive 33 per cent, down from 42 per cent the previous quarter, but still more positive overall than Auckland.

Christchurch increased to a net positive 3 per cent – its highest result this year.

The most positive markets remain unchanged from the previous quarter, with Queenstown in the lead at 66 per cent, followed by Tauranga/Mount Maunganui (52 per cent) and Hamilton (41 per cent).

Commercial upbeat

Confidence in New Zealand’s commercial property market also remains upbeat ahead of the general election.

Colliers International’s latest quarterly Commercial Property Investor Confidence Survey shows overall confidence at 20 per cent – a slight dip from 22 per cent the previous quarter.

Auckland and Wellington recorded slight decreases in confidence, to 38 per cent and 23 per cent respectively, down from 41 per cent and 24 per cent respectively.

Christchurch got a single percentage point boost in confidence, but sentiment remains negative overall at -2 per cent.

McMahon says the results across the different commercial sectors have been a lot more varied.

“The retail sector has seen an increase in all three main centres, and office sentiment has reported an increase in both Wellington and Christchurch,” he says.

“However, confidence in the industrial sector is down, resulting in a dip in overall confidence.

“That result doesn’t necessarily suggest a decline in the industrial market, and is possibly a reflection of the lack of stock available for sale and the shortage of industrial vacant land creating tight conditions.”

Top four unchanged

The top four regions for overall commercial confidence remain unchanged for the fifth consecutive quarter.

Queenstown remains on top at 59 per cent, followed by Tauranga/Mount Maunganui (55 per cent), Auckland (38 per cent), and Hamilton (33 per cent).

Colliers International’s research drew on a total of 15,120 responses to its residential survey and 5,922 responses to its commercial survey.