2011 Market Review

Posted on Tuesday, May 3 2011

Recently the watch dog of the global economy, the International monetary fund, maintained its projection of a 4.4% expansion of the world economy in 2011.In so doing, they downgraded the New Zealand forecast on the back of the Christchurch earthquake to just 0.9% this year but jumping to 4.1% next year.
The commodity boom continues unabated and Auckland has seen a resurgence in its residential property market. In fact, some commentators are predicting Auckland to be growing at between 3% and 3.5% by the end of the year. Growth over the full year in Auckland could average 2.5% with 1.5% for the rest of the country.

This has led to talk of a “two tier” economy with the rest of the country trailing Auckland’s growth and posing problems for the Reserve Bank which operates a “one size fits all” financial policy in its control of the official cash rate.

The upshot of all this talk of growth is that we are picking the commercial property market will improve in the second half of this year and, barring no more global or local shocks, will really start to strengthen in 2012.
However, it must be remembered that any improvement is coming off a low benchmark in terms of rental rates which have taken a battering across all sectors since 2008. Nevertheless, it will be an improvement and will signal the start of the next cycle.

This year will be the last for a while where buying opportunities will present themselves and the long-term investors are out there with their cheque books ready to do deals. The same canny investors will be the ones selling at a handsome profit at the peak of the next cycle.
If you are seriously thinking of investing in commercial property then this is the year to do it

D.J. McMahon
Managing Director
McMahon Commercial

 

 

 

 

 

 

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Expert's Bio

Denis McMahon

Brought to you by Property Managers Ltd: Pacific Property has been formed with the aim of building, over time, a diversified portfolio of Industrial, Retail and Commercial properties to provide strong sustainable returns to investors which will be managed by experienced property manager, Property Managers Limited (PML). The directors of Pacific Property Fund are Denis McMahon and Philip Tushingham, who together have over 45 years of experience in investing in, and managing commercial properties. “Pacific Property presents an opportunity for investors to invest in a brand new quality industrial building in Mount Maunganui and to join us as we build a quality commercial property portfolio diversified both geographically and across industrial, retail, and commercial assets.”

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