Investor sentiment edges up despite global uncertainty
New Zealand’s commercial property investors are showing tentative signs of renewed confidence, based on Colliers’ latest investor sentiment survey.
The national net positive rating rose to 16% in the first quarter of 2025, up from 12.6% in December 2024 and 10 percentage points higher than the first quarter of 2024. This suggests a modest recovery in investor confidence, though volatility remains.
Colliers attributed the improvement to a mix of encouraging and cautionary signals. Lower interest rates and early signs of economic recovery are helping to restore market confidence. However, ongoing uncertainty around global geopolitics – particularly the United States’ recent imposition of trade tariffs – continues to temper enthusiasm.
Industrial property leads while retail lags
Sentiment varied widely across asset classes. Industrial property remained the top performer, maintaining a national net positive rating of 45% – unchanged from March 2024. The office sector recorded a broadly neutral score of -2%, though this masked significant regional differences.
Confidence was highest in Christchurch, where office vacancy rates had declined in recent years. Auckland also showed a generally positive outlook, while Wellington lagged behind amid weakening demand from the government sector.
The retail property sector continued to struggle, though there were signs of improvement. The national net score of -15% marked the 13th consecutive quarter of negative sentiment – but it was the least negative result in that time.
Christchurch takes the lead among regions
Of the 13 regions surveyed, 11 recorded a net positive score. Christchurch regained its position as the top-performing centre, with a net rating of 37%, overtaking Auckland. Wellington continued to trail, consistent with its broader office sector challenges.
Colliers noted that while optimism was building, investor caution remained. The Reserve Bank of New Zealand may lower the official cash rate further in 2025, which could support confidence. However, the path ahead was clouded by geopolitical tensions.
Uncertainty around the duration and extent of US trade tariffs – and potential responses from other countries – was expected to keep sentiment sensitive in the months ahead.
Investors and agents alike will be keeping a close eye on interest rates, global markets and local demand – all of which will shape opportunities in 2025 and beyond.