Economist says housing concerns had been showing up in surveys for a while but they could improve soon
Lower investor confidence in Auckland’s property market has impacted the overall confidence of investors in the country – pushing levels to a three-year low, according to ASB Bank’s latest survey.
The bank has found that investor confidence plummeted from a net 15% in the June quarter to a net 8% in the September quarter.
Chris Tennent-Brown, senior economist at ASB Bank, said there were many factors that have driven the results.
“It's more a case of expectations about the returns on a number of investments slipping over this period,” Tennent-Brown said, as reported by NZ Herald.
Read more: Auckland's house sale activity continues to increase
The percentage of property investors who believed that the return on their investments will just worsen in the next year jumped from 13% to 19%.
Meanwhile, those who believed that their home in Auckland would provide the best return on investment dropped from 15% to 14%, while those who believed that their investment property in the region would provide the best return also fell from 21% to 19%.
On the bright side, confidence in rental properties outside the region increased from 12% to 15%.
"I think that outside of Auckland, the combination of lower interest rates, rising rents and house price gains have been buoying confidence," Tennent-Brown said. "We've seen reasonable house price appreciation in a number of areas outside of Auckland over the past year, and I think that's what is helping sentiment."
"We now have very low interest rates, the Capital Gains Tax concerns have gone, and the busy period for home sales is upon us. I think the signals people will get from the market itself over the months before Christmas could really swing perceptions. We are expecting a reasonable sales period over the coming month or so, before we head into the quiet holiday period."
