Property Confidence Falls

Property Confidence Falls

The New Zealand Property Institute Property & Construction Confidence Index, compiled in partnership with Maltby & Partners Ltd (www.maltby.co.nz) and conducted by UMR Research has continued its downward trend and fallen to its second lowest point since the index began in December 1999 ( lowest point May 2000).

New Zealand Property Institute CEO Conor English said that the index has halved in the last five months, from a peak of 110 in November 2002 to 50 in February 2003.

Mr English said today, "This is quite a sharp decline. The index now lies below the results recorded after September 11th. The threat of war in Iraq appears to be having a substantial impact on the mood of the construction property sectors.

"Auckland is now less confident than Wellington on a three month rolling average, a reversal of the previous 12 months data. The leaky building problem, the departure of the Americas cup along with the recent financial failure of some construction companies has likely contributed to this change in sentiment," Mr English said.

The Institute said respondent's expectations of conditions in the construction and property industry over the next three, six and twelve months were have all fallen. The outlook over the next 6 months sees those who believe it will "get worse" rise from 18% late last year to 34%. Total "better" has dropped from 32% to 23% and "stay the same" dropped from 49 to 41%.

The 12 months outlook has also worsened on a three month rolling average with 20% believing things will "get better", 30% "stay the same" and 44% "get worse".

Mr English said, "Property has enjoyed an excellent period over the last couple of years. This has been driven by low stable interest rates, high immigration, poor returns in alternative investments, a low dollar and good rural incomes. Following September 11 we have also seen increased investment from expat New Zealanders and other people based overseas who are investing in future lifestyle.

"Given that many of the fundamental drivers remain pretty positive, this fall in confidence may yet prove to be temporary if the International environment becomes more certain. The high sales volumes and prices experienced

Perceptions of the Labour Progressive Government's understanding of the key issues that affect New Zealand's construction and property industry are still quite negative. 54% believe that the Government does not understand the issues well, with 39 % well, and 6% unsure.

The NZ Property Institute has some 3000 members who influence either directly or indirectly decisions made on New Zealand's $4200 billion property asset base.

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