ASB Investor Confidence Report Quarter 4 2012
26 February 2013
Investor confidence steady as
• Investor confidence in Q4
2012 remains unchanged on Q3 2012 at
• Rental property retains top spot as most attractive investment class.
• Investors reviewing stance on assets with higher yields.
Investor confidence has held its ground according to the latest ASB Investor Confidence Survey. ASB Head of Wealth Advisory Jonathan Beale says, “The ASB Investor Confidence Index has continued to sit at a net 13 points during the three months to December 2012. The fact it hasn’t budged since the previous quarter means investors remain the most upbeat they have been since the end of 2010.”
Mr Beale points out that while investor confidence has remained steady overall, the month-by-month figures show that what happens internationally still weighs heavily on investors’ minds and can lead to a roller coaster ride as confidence soars and slides.
“Investor confidence reached a high of net 22% in the first month of Q4’12, before declining to 10% in November 2012 and dropping further to 6% in December 2012. Optimism shone through when progress was being made in the Eurozone debt crisis and the risk of a disorderly default was reduced. Then the optimism ebbed away following the US fiscal deadlock towards the end of the year.”
On balance, respondents remain optimistic about investment returns throughout the country and across most demographics. Rental property is viewed as being the asset most likely to provide the best returns for investors - up 1 point to 19% of respondents.
“In a reflection of what we keep hearing about in regards to the uneven demand for property around the country, Aucklanders remain most optimistic about returns on rental property. 24% of Auckland respondents perceived property as the most likely to give the best return, up 1 percentage point from Q3. In contrast, 18% believed Term Deposits, (up 1 point), and 12% believed KiwiSaver, (also up 2 points),”says Mr Beale.
“Compare that to outside of Auckland where Rental property and Term Deposits share top spot on 17%. Managed Investments and KiwiSaver are both up 3 points to 16% and 15% respectively. Bank Savings accounts have fallen significantly, down 4 points to just 5%.”
Mr Beale believes this lift in managed investments is a sign a greater percentage of investors are feeling more confident seeking out assets with higher potential yields, instead of sticking with more secure options.
The analysis is based on 660 online interviews with adults aged 18 years and older throughout New Zealand.
Chart 1: Net investor confidence (difference between the “better” and “worse” figures)
Chart 2: Percentage of total sample who feel this type of investment gives the best return
Chart 3: Percentage of total sample who feel this type of investment gives the best return, Auckland and rest of NZ