Wellington bounces back following November quake
Confidence in Wellington's commercial and residential property market has risen since the deadly November quake, with top quality office space hard to come by.
The latest commercial property survey from Colliers International shows overall confidence has grown since the magnitude 7.8 earthquake, and is now sitting at a net 29 per cent positive, up from a net 22 per cent at the end of last year.
Confidence in the office market hit a record high, at a net 39 per cent positive, as the amount of available office dropped by 7 per cent.
Colliers International Wellington managing director Richard Findlay said the office market was experiencing an "accelerated development cycle with unsatisfied demand for quality and earthquake resilient office space".
"Our prime and A grade office vacancy rates are at an all-time low. The overall office stock has been reduced as a consequence of the November earthquake."
Meanwhile, overall confidence in Wellington's residential market was defined by the lack of listings, with residential agencies reporting historically low levels of properties for sale, Findlay said.
"Business confidence in Wellington remains high and as a result there are more buyers looking to upgrade their homes.
"The Wellington residential investment market is strong, with large increases in rentals which is having a positive influence in prices."
Colliers International research and consulting national director Alan McMahon said while there had been a dip in commercial investor confidence across New Zealand, a significant majority were still optimistic. Overall confidence was a net 24 per cent positive, down from 32 per cent at the end of 2016.
"New Zealand market fundamentals are sound, with demand for offices, shops, and industrial property steady to strong across the country.
"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 positive has held the top spot for the last seven quarters.
The top four most upbeat regions was rounded out by Tauranga/Mt Maunganui (56 per cent), Auckland (47 per cent) and Hamilton (41 per cent), all strongly positive for the third quarter in a row.
The top residential market is also Queenstown, where investor confidence is a net 74 per cent positive, followed by Hamilton, Tauranga/Mt Maunganui, and Auckland.
"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," McMahon said.
"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," he said.
"At the other end of the scale Christchurch confidence is neutral, suggesting equilibrium between demand and supply."
The surveys were based on 2299 responses from the commercial sector and 14,781 responses from the residential sector.