Real estate confidence still weak, survey finds

Weakness is showing up in the residential real estate and investment market, according to the latest BNZ confidence survey. Photo / Greg Bowker

Some extra weakness is showing up in the residential real estate and investment market, the latest BNZ confidence survey has found.

According to the survey, published today, a net 42 per cent of respondents were confident about the economy in a year's time, compared to 35 per cent three weeks ago.

BNZ chief economist Tony Alexander said that while confidence levels had essentially stabilised at high levels, there was no indication of a traditional correlation between strong sentiment and strong spending.

"In fact it is notable from reading the comments submitted that there has been some extra weakness in the residential real estate and investment market over the past few weeks, and most other sectors remain as patchy as ever," said Alexander.

"There are signs that companies want to hire people again but most appear unwilling to actually seek out staff. Investment plans remain largely on hold and there is caution regarding the strength seen recently in some parts of the construction section."

The tone of the survey suggested the economy was improving slowly, but many respondents were waiting for the budget in May to take away some uncertainty.

Residential real estate was weak with few buyers and things clearly on hold until details of tax changes were revealed in the budget, while farming appeared to be in acceptable shape, Alexander said.

"Retailing and commercial property continue to struggle, but the forestry sector is strong due to firm demand out of China, while there is clear improvement in the information, communications and technology sector."

- NZPA