Caution in commercial property sector
A new report shows investor confidence in Waikato commercial property is still positive, but it's waning.
Colliers' Investor Confidence Survey shows a net positive 4 per cent rating in overall confidence for the September quarter, with Hamilton ranking as the fifth most positive city in the country.
But local confidence has taken a tumble since the beginning of the year.
In the March quarter confidence was rated 12 per cent. That dropped to 7 per cent in the June quarter.
Those on Colliers' database involved in the industry, from large institutional investors to small mum and dad private investors, were surveyed, the company said.
Colliers Hamilton director Mark Brunton attributes the decline in confidence to major economic changes in the region like the lower dairy payout, but said the area is still in an optimistic mode.
"Commercial property is still buoyed largely by long-holding, low interest rates," he said.
"We're still largely in positive territory and it's a good sign."
He said the close proximity to Auckland and the growth in its industry is underpinning the positive feel here and he expects the positivity to increase.
"Could it be better? Yes. But we're doing the best we can at the moment."
Property Council spokesman Graham Dwyer said the dwindling confidence percentage shows a negative influence seeping in from unstable foreign markets.
"What we're seeing in Hamilton, I think, can be seen as a reflection of the concerns in Europe . . and it is of ongoing concern.
"There's a lot of uncertainty and uncertainty makes it difficult to make decisions," he said.
"It's pleasing to see Hamilton remains a genuinely positive place. It's a good reflection of Hamilton's resilience."
NAI Harcourts managing director Mike Neale said the survey results were to be expected, but the size of the confidence drop had been surprising.
"I think it's a very challenging economy but . . . I thought we would be where we were this time last year."
Hamilton investor confidence in the September 2011 quarter was at 8 per cent.
Neale said the strength of the local "golden triangle" was evident with Auckland, Tauranga and Hamilton registering in the positive figures, while threats of government cuts in civil service jobs and earthquake standard concerns were likely the cause of Wellington's negative numbers.
Wellington sits on a net negative rating total of 16 per cent, while Palmerston North is the most pessimistic city overall with negative 24 per cent confidence.
Christchurch is the most positive city, it has jumped from 25 per cent confidence in the September quarter last year to 54 per cent for the same period this year.
Queenstown follows on 45 per cent, Auckland registers at 25 per cent and Tauranga-Mount Maunganui is ahead of Hamilton on 19 per cent.
- © Fairfax NZ News