Money is still looking for a home
Nov 8, 2016
With a gradually ageing population and increasing numbers of retirees downsizing and looking for income at better than bank interest rates, we are witnessing continued strong demand from these and other investors for well located, well leased properties.
Why is this happening? There are three main factors
- Historically low interest rates producing limited yields
- A volatility in the equities markets providing a perceived higher risk profile
- Investors having a natural affinity to property
What are we currently seeing in the market?
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- Sub 5% yields occurring quite frequently
- Investors paying more for land banking positions at low yields ahead of developers
- Greater demand for higher quality, larger “owner occupier’ type apartments
- The continued strength of the property syndication market
- Land being harder to fund and more difficult to successfully develop
What is the investment property outlook looking to 2017
- Continued strong demand for good investment property
- Continuation of the low yield environment
- A lack of alternatives still driving NZ investors towards property
- A flight to quality for all asset classes
- Emerging opportunities for experienced, well-funded developers with proven track records
- Institutions continuing to improve their portfolios by selling power performing assets
Please feel free to consult with our team if you require any advice or appraisals etc. We would be most happy to assist you with your future property decisions.
Previous Market Commentary: Snapshot: Residential Development Outlook