BNZ Weekly Overview

BNZ Weekly Overview

Our first monthly survey of Weekly Overview readers for 2009 has revealed a deterioration in sentiment from the last survey back in December. A net 23% of respondents expect the economy to get worse over the coming year from 6% three months ago.

Businesses generally are facing cash flow constraints and are trimming expenses in expectation of tough conditions continuing. Retailing remains weak, tourism operators are fearful, residential construction is poor, but some farmers are feeling happier.

There is however one very clear change in this month’s survey results compared with surveys late last year and that is in residential real estate. Lower interest rates along with increasing perceptions of a shortage have contributed to a significant improvement in sentiment. At the same time as vendors have become more realistic in the prices they will accept more buyers have been entering the market. They appear to be a mixture of both owner-occupiers getting on with life and investors attracted by yield compared with the alternatives.

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