The recently released Colliers Property Confidence report brings into stark focus the knock-on effects of the global recession. Sentiment among respondents shows a significantly pessimistic outlook especially amongst Aucklanders and especially so in the retail premises sector.
This downturn in sentiment and lack of activity generally in the market is directly resulting in an upsurge in listings on the website. In March the total of commercial property for lease and purchase grew to yet another new high of over 22,000. Just 12 months ago the site hosted just 12,800 listings. The graph below shows in dramatic style the steady rise of inventory of commercial property since early 2007.
The graph also shows the level of activity of searching on the site by visitors both here in NZ and overseas for commercial property. This level of activity amounting to 8,000 to 9,000 visitors per month has been pretty consistent over the past 12 months. What is interesting is the make up of those visitors and especially the component of international visitors viewing commercial listings.
In first 3 months of 2009 traffic from overseas is up 18%. A year ago 1 in 5 of all visitors viewing commercial property was from outside NZ, 12 months later this has grown to 1 in 4. Large increases have been seen from Australian visitors (+ 76%), Canada (+67%) and Japan (+107%) – meanwhile traffic from the US is up only 8%, meanwhile South Africa is down 31% and Hong Kong shows a 22% decline.
Returning to the level of inventory it is interesting to see the geographical distribution of listings. The two pie charts below display the make up by region of the country of the 14,200 leasehold properties and the 8,000 properties for sale.
What is clearly most striking is the fact that over 80% of all leasehold property is located in the main 3 centers with 58% in Auckland alone. By comparison with commercial property for sale the 3 main centers account for only half of all listings.