With Spring on our doorstep and as the days get longer, it appears as though there is a bit more positivity in the Commercial Real Estate market too.

This week’s drop in the OCR rate, taking it to 3.00%, is more stimulus for both owner occupiers and cashedup investors. Finally, too, we are seeing leveraged, and value-add investors looking more favorably at opportunities. While it is still difficult to get both sides together there is more stimulus for sure. Now is a good time to be buying property. Evidence is strong that when priced right, transactions are happening and often in competition.

We are also seeing a marginal increase in leasing demand. In Auckland this has been more pronounced and indicates better times ahead here too, as we tend to follow trends evident up North. On a further positive note, leasing stock looks to have stabilized.

On a macro basis, the Ag sector continues to lead the recovery and with certainty now about tariffs New Zealand seems well positioned in respect to several of our major competitors. 

The manufacturing index is also on the improve with the latest survey putting it above 50%, confirming it is in growth mode. The service sector, however, is still lagging and remains critical to a sustainable recovery

The recent annual rates increase, particularly in Hamilton City, has had a significant adverse impact on both tenants and owner occupiers. When you couple this with the new RVs, where the majority of commercial value seems to have increased, the sector is bearing an unfair burden for balancing the City’s books. As we alluded to in May this is rendering Hamilton City less competitive when compared to our neighbours in Waikato and Waipa Districts. This is particularly prominent in Industrial property and in areas like Northgate (Horotiu) and the Airport and Hautapu.

Residential activity remains strong and if anything has been constrained by a lack of stock in recent months. The first home and investor markets in particularly have been very active and the re-emergence of residential “flippers” is a clear indication of an expectation of a lift in values. Hamilton continues to benefit from migration out of Auckland and bucking the trends in other major North Island cities like Auckland and Wellington. This is further evidenced on the rentals side, where one-third of all our letting inquiry is from out of towners. We see this as a leading indicator for commercial activity.

We are pleased to announce the arrival of Shar De Razes in our Body Corporate team. She replaces Mark Chitty who has left to pursue personal interests. Shar’s details are on the title page above.

If we can assist with Commercial Leasing and Sales, Body Corporate or now Commercial Property needs then please reach out to your preferred agent.