Uncertainty around house prices and lending restrictions continue to take a toll on Kiwi investor confidence, a new report has suggested.
According to ASB’s latest ASB Investor Confidence Report, confidence among Kiwi investors has fallen to the lowest in more than two years. It found a net investor confidence of 10% in the three months to December, down from 19% from the previous comparative period.
“I think it would be impossible for confidence to do anything but fall when we think about all the changes and uncertainties we had to deal with late last year,” ASB senior wealth economist Chris Tennent-Brown said. “Sharemarkets both here and in the US peaked in September, but since then we've had a solid three months of negative news, and that’s showed up everywhere from the world’s sharemarkets declining through to KiwiSaver balances.”
The report revealed 25% of respondents expected returns from their investments in the next 12 months to increase compared with 29% last quarter, and 39% expect returns to stay the same compared to 42%, while 15% thought it would decrease, up from 10% in the third quarter.
Global sharemarket volatility over the fourth quarter, rental property tax changes, and foreign ownership law changes all take a toll, Chris Tennent-Brown noted.
The report also revealed personal homes continue to be viewed by respondents (24%) as the best investment for good returns, followed by rental properties (14%). In Auckland, respondents (22%) believe their own homes provide the best return on investment, followed by rental property (17%). Meanwhile, after briefly being viewed as the best bank product for return on investment last quarter, KiwiSaver slipped back to 10%, with term deposits again viewed as the best investment for returns (at 13%).