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High house prices are driving greater investor confidence, according to the ASB bank’s Quarterly Investor Confidence Survey.
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Confidence took a hit when the Covid-19 pandemic first struck, but it appears to be picking up. Source: 1 NEWS
However, while the survey shows a rebound in confidence from the record low in the previous quarter, it is still in negative territory, standing at -11 percent.
That figure is a -25 percent improvement from the previous survey.
In a statement today, ASB said a stabilizing equity market and a better-than-expected real estate market were driving momentum.
“Going into lockdown, many experts and government agencies are forecasting a material housing market correction that will accompany New Zealand’s deepest economic recession in decades,” said ASB Senior Economist Chris Tennent-Brown.
“We were less pessimistic with our prediction of a six percent drop in prices, but some suggested that house prices fell in double digits.
Fast forward a few months and national house prices have rebounded to new all-time highs. Uncertainty is never good for confidence, but as the Covid outlook in New Zealand has become clearer, this survey reflects a rising wave of confidence “.
But people are concerned about the returns offered by KiwiSaver and bank deposits.
Tennent-Brown attributed the change in mood to changes in member balances throughout the year, with record returns from KiwiSaver last year boosting sentiment in the first quarter of the year, and uncertainty from Covid-19 and the fall in fund balances contributed to the decline in the second two quarters.
“It has been a volatile year for equity markets, and that has translated into investments like KiwiSaver. But hopefully people have stuck to their long-term strategies and seen a decent recovery in KiwiSaver balances over the last few years. six months”.
