The uncertain impact of the proposed capital gains tax (CGT) has not dampened the optimism of commercial property investors, who remained positive about the market.
A survey conducted by Colliers International revealed a net positive 22% (optimists minus pessimists) of respondents expect investment conditions to get better over the next 12 months, which is broadly in line with the last four quarters. The survey was undertaken during the release of the Tax Working Group’s final Future of Tax report, which recommended a well-signalled capital gains tax.
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“While the Tax Working Group’s recommendations could have far-reaching impacts for the commercial property sector, if implemented, our survey shows investors remain broadly positive about conditions in the year ahead,” said Chris Dibble, research and communications director at Colliers, who also said that 10 of the 12 regions surveyed recorded a net positive score.
Dibble said that it’s important to remember the Tax Working Group’s recommendations are only proposals at this stage, and a significant process lies ahead before any tax changes are introduced by 2021.
The survey also returned Queenstown to the top spot for commercial property investor confidence, after being eclipsed by Tauranga/Mt. Maunganui in the previous quarter. Queenstown recorded a net positive 52%, up 6% from the December 2018 quarter.
“Population and tourism growth continue to underpin confidence within the Queenstown commercial market, with significant investment forecast in both infrastructure and construction over the next decade,” said Alastair Wood, managing director of Colliers in Otago.
“Queenstown’s lifestyle offering and strong historic capital gains combine with chronic supply constraints to maintain optimism in the market.”