‘It already feels like Christmas’

Strong investor interest has fuelled exceptionally high levels of first quarter commercial property activity in Auckland.

The Auckland director of investment sales at Colliers International, Gareth Fraser, says current activity feels more like Christmas.

The market has barely taken a breather after a surge in sales in late 2018, he says.

“Last year started off slowly as a flow-on effect from the election in late 2017, but gradually built momentum to the point where it was then the strongest finish that we’ve ever seen. The third and fourth quarters of last year were the strongest I’ve ever seen in the real estate market.”

Fraser puts it down to New Zealand’s stable, growing economy and super-low interest rate environment. He says the high levels of activity in early 2019 have been accentuated by the fact that this time last year was so slow.

“The start of 2019 is looking really good. It feels like that Christmas rush has really carried through into late January, early February. We’ve never had more activity in the pipeline and we’ve never seen so many hungry, cashed-up buyers beating down the door trying to buy something at this time of year. We can’t see things slowing down over the next 12 to 18 months. These are ideal conditions for investment.”

Trends to look out for this year include the possibility of a capital gains tax on investment properties, and diminishing returns for residential investors.

“Labour’s position on capital gains is being very closely monitored and a number of our clients are commenting on that,” says Fraser.

At the entry level of the market, a lot more residential investors are considering commercial property investments.

He also expects to see an increase in demand from government tenants in the next 12-18 months.