New Zealand’s economy has continued to outperform market expectations and, despite the impact of COVID-19 lockdowns, is now larger than its pre-COVID-19 levels.
The economy has continued to outperform market expectations. Over the last 12 months economic activity in Auckland has been building momentum. Labour market conditions have tightened with unemployment at 4.7% and businesses reporting difficulty in finding skilled staff.
New Zealand’s economy has largely recovered from the impact of the COVID-19 restrictions imposed in 2020. By the end of December 2020, economic activity was only 0.9% smaller than the same quarter in the previous year.
Pre-COVID-19 the office market had experienced a period of strong growth. Underlying market fundamentals were strong with low vacancy rates in most precincts, rising rents, increasing levels of demand, increased development activity both in the CBD and the metropolitan markets, and steady investor demand.
New Zealand's economy continued to grow over the second half of 2019 albeit at a slower pace. Expectations are that this will end abruptly as the impact of COVID-19 flows through to the economy in 2020 and 2021. Economists are now forecasting a recession during 2020 with estimates of the fall in GDP ranging from -3% to -9%.
Well capitalised investors are still active in the market chasing good quality property investment opportunities with demand still exceeding agents’ ability to source appropriate stock.
Well capitalised investors are still active in the market chasing good quality property investment opportunities with demand still exceeding agents’ ability to source appropriate stock.
