Colliers International’s Research team has released its Top 10 Predictions for 2017, on trends and moves across the property sector.
1. GDP growth to track higher than expected:
Some of this will be due to better than forecast employment figures and export opportunities, but also due to rebuild requirements from the latest series of earthquake damages. Early estimates suggest around $2 billion to $5 billion will need to be spent – about 1 per cent to 2 per cent of GDP. This will support a wide ranging number of businesses across the country.
2) Election year promises:
The folly of expecting elections to go the way pollsters predict will play heavily on the mind of the National Party in 2017. Property could be a major beneficiary from promises made in election year 2017. Higher levels of government spending will likely be on the table due to the surpluses achieved in the government books. Activity catalysts like tax cuts, relief packages and tweaks to infrastructure programmes could be some of the carrots on offer to provide property additional support to underlying fundamentals.
3) Interest rates to rise, but still near record lows:
Interest rates will rise from record lows as talk of inflation re-emerges and the cost of debt for the banks starts to increase. Although a slower rate of yield compression will be the outcome, the gap between costs and returns remains globally positive in most sectors. Interest rates near record lows will still be a major driver for purchasers for some time yet.
4) Desperately seeking sales:
Investment intentions are sky high, but have only just shown signs of reaching the past cyclical peak of more than 8000 sales p.a. – a feat reached back in 2003. We will be watching intently over 2017 to see if investors can break through this record or fall short – desperately wanting to purchase, but unable to find suitable stock.
Source: NZ Herald
Image Source: NZ Herald