Investor confidence takes off as investors return to rentals

Investor confidence takes off as investors return to rental property

· Investor confidence climbs sharply at the start of 2012

· Rental Property captures the top popularity ranking from Term Deposits

· Investors look for higher returning assets after 2011’s uncertainties

Investor confidence is climbing out of the doldrums as investors flock to rental property for the first time in two years, according to the latest ASB Investor Confidence Survey.

The ASB Investor confidence index climbed 7 points to a net 12 percent in the three months to the end of March 2012. ASB Head of Wealth Advisory Jonathan Beale says this shows a turnaround in investor attitudes from late 2011, when the December earthquakes in Christchurch and the looming crisis in Europe threatened to topple the local recovery.

“Following the turbulence at the end of last year, 2012 started with a bang, with investor confidence climbing each month until April. However in recent weeks Greece is back in the headlines as the crisis continues to escalate, and question marks remain about whether this new-found investor confidence will last.”

Mr Beale says for the first time since Q1 2010 Rental Property holds the top spot as the investment that offers the best returns. “Kiwis’ enduring love affair with rental property has rekindled after 24 months in the cold. A total of 19 percent of investors now believe rental property offers the best returns, rocketing up from 14 percent last quarter. Meanwhile Term Deposits have taken a 3 point tumble to second place at 16 percent,” he says.

“Our third ranked investment class is most intriguing, however. Managed Investments and Superannuation have soared 4 points to 13 percent, their highest level in four years. Shares have also been climbing every quarter since Q3 2010, now fourth equal with KiwiSaver which is steady at 10 percent. Bank Savings accounts are last at 8 percent.

“The low interest rate environment seems to be influencing investor perceptions markedly. Investors appear to be moving away from the traditionally lower risk investment options and searching for those with the potential for higher returns. This is a turnaround from the flock to caution we saw in the midst of the financial crisis, but unsurprising after the performance of share markets and managed funds as markets improved in the first few months of 2012.”

ENDS

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