Capital gains news has little impact
The confidence of owners of shops, offices and factories in their investments is slipping but remains pretty positive even with a new capital gains tax on the horizon.
Queenstown, Tauranga and Wellington are the three most confident regions in that order, the three-monthly confidence survey of almost 1600 owners by real estate services firm Colliers International for the first quarter of 2019 shows.
Overall national confidence is a net 22 per cent positive – that’s 22 per cent more optimists than pessimists – down from the 2018 high of net 26 per cent in the December quarter.
The survey of 12 regions was taken during the release of the Tax Working Group’s final report which recommended a wide-ranging capital gains tax which could cost commercial property owners ‘‘billions’’. At the same time the experts are warning that a slowdown is on the cards, after a golden run for commercial property investors.
Of the 12 regions, eight are less confident than a year ago including Auckland, Queenstown, Tauranga-Mt Maunganui and Hamilton.
Thousands of tourists flocking to the shores of Lake Wakatipu and the shops in Queenstown are giving owners of commercial property there strong confidence in their investments, but it’s lower than a year ago. Queenstown investors topped the confidence tables at a net 52 per cent positive in the first quarter, up 6 per cent from the December quarter, but 10 per cent down on a year ago. The resort region reclaimed top spot from TaurangaMt Maunganui in the previous quarter.
Population and tourism growth were underpinning optimism in Queenstown, Colliers said.
Commercial property owners regarded Tauranga-Mt Maunganui as a ‘‘safe haven’’ with its strong population growth and booming regional economy. They remained the second most positive in the country at a net 51 per cent. In the capital, investor confidence has absolutely positively climbed to a net 43 per cent from 33 per cent a year ago. They are benefiting from rising rents and historically low vacancy rates for office and industrial space exacerbated by the Kaiko¯ ura earthquake in late 2016.
In the Wellington industrial sector, Colliers associate director Tim Julian said industrial stock had been removed from the market through conversion to retail with Petone a prime example.