Confidence in Hawke’s Bay property market growing

Auckland, March 24, 2017

Confidence in the Hawke’s Bay commercial and residential property markets is growing, the latest Colliers International quarterly survey results show.

The Commercial Property Investor Confidence Survey and Residential Property Market Outlook Survey were conducted by the Colliers International Research and Consultancy team this month.

The results show net confidence in the Napier/Hastings commercial property market is at 13 per cent, up 1 percentage point from the last quarter.

Confidence in the residential property market is at 41 per cent, up from 38 percent in Q4 2016.

Napier/Hastings was the only area outside of Wellington to see confidence grow across both the commercial and residential markets.

Colliers International Hawke's Bay Sales Manager Kerry Geange says commercial brokers are seeing that confidence reflected in the strong levels of enquiry from investors and owner-occupiers, particularly in the industrial sector, and larger-value commercial investments.

“This has also translated into developer confidence, with the construction of new industrial stock to meet the increasing demand for quality industrial properties,” he says.

“We have also seen continued growth in enquiries from investors from outside the region, who are attracted by competitive yields and a safe economy. That means confidence in the region appears to be not only local, but far wider, which is really positive.”

Geange says the leasing market offers a good snapshot of overall confidence.

“Colliers International will do over 20 leases this month, which is a sensational result for our landlords by our leasing team,” he says.

“The overall positive outlook appears set to continue with the announcement of thousands of new residential sections to meet buyer demand and the strength in the horticultural and tourism sectors.”

The Colliers International surveys found overall net confidence in the New Zealand commercial property market remains positive at 24 per cent, down from 32 per cent in Q4 2016, while confidence in the national residential market remains steady at 41 per cent.

Colliers International Research and Consulting National Director Alan McMahon says while there has been a dip in commercial investor confidence, the 24 per cent net positive result means a significant majority of those who think the market will change are optimistic.

“New Zealand market fundamentals are sound, with demand for offices, shops, and industrial property steady to strong across the country,” he says.

“Centres with good growth in resident or visitor numbers, which boosts demand for all property types, tend to have higher confidence.”

The top commercial market for investor confidence is Queenstown, which at 67 per cent has held the top spot for the last seven quarters. The top four is rounded out by Tauranga/Mt Maunganui (56 per cent), Auckland (47 per cent) and Hamilton (41 per cent) for the third quarter in a row.

The top residential market is also Queenstown, where investor confidence is at 74 per cent. The hot spot is followed by Hamilton (59 per cent), Tauranga/Mt Maunganui (56 per cent), and Auckland and Nelson (43 per cent).

McMahon says the overall positivity in the residential sector is a strong result.

“It is no surprise that where population growth is strongest, upward price pressure is more evident than in centres with slow-growing or static populations,” he says.

“The exception is Wellington, which is showing huge confidence despite a relatively slow-growing population. Our view is that Wellington has been too cheap for too long and is now playing catch up.

“At the other end of the scale Christchurch confidence is neutral, suggesting equilibrium between demand and supply.”

The surveys were based on 2,299 responses from the commercial sector and 14,781 responses from the residential sector.

ENDS

Full results are available in the accompanying Commercial Property Investor Confidence Survey and Residential Property Market Outlook Survey.

Commercial_Property_Investor_Confidence_Survey_Q1_2017HB.pdf

Residential_Property_Market_Outlook_Survey_Q1_2017HB.pdf

About Colliers International:

Colliers International Group Inc. is a global leader in commercial real estate services with 15,000 professionals operating from 396 offices in 68 countries. With an enterprising culture and significant insider ownership, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide. Services include brokerage, global corporate solutions, investment sales and capital markets, project management and workplace solutions, property and asset management, consulting, valuation and appraisal services, and customized research and thought leadership. Colliers International has been ranked among the top 100 outsourcing firms by the International Association of Outsourcing Professionals’ Global Outsourcing for 10 consecutive years, more than any other real estate services firm.

Founded in Australia in 1976, Colliers International is the largest locally formed real estate services firm with professionals worldwide. Find out more at www.colliers.co.nz

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