Source: Radio New Zealand
The third quarter ASB Investor Confidence Survey indicates a clear divergence of strategies between investors over 60 and those under 30 years of age. RNZ
Investor confidence is improving, with a clear divergence of strategies between investors over 60 and those under 30 years of age.
The third quarter ASB Investor Confidence Survey indicates an overall 9 percent improvement in confidence, with a net positive investor confidence rate of 10 percent, compared with 1 percent in the last quarter.
“While confidence has edged up, the underlying drivers of uncertainty, like global events, policy changes, and a sluggish property market, remain, ” ASB senior economist Chris Tennent-Brown said.
“Looking ahead, the overall message is one of cautious optimism.
“Markets have recovered since the volatility we had earlier in the year, and that’s impacting sentiment positively now, but the flat housing market and lower term deposit rates continue to weigh on the mood.”
He said investor confidence was highest in Auckland at more than 16 percent, compared with the rest of New Zealand at 7 percent, with the South Island was at 8 percent and Lower North Island at the bottom with just 3 percent.
“Perceptions about housing being the place to generate the most wealth are very low for under 30s, who may still be trying to work out how to get into the property market, a stark but understandable contrast to the over 60 participants, whose wealth may be tied up in property,” Tennent-Brown said.
He said there was a clear difference between the investment strategies of young and old.
Perceptions of a home as the best returning investment had dropped to the lowest level since first measured in 2015, with under 30s driving the shift to other investments.
“We expect the older age brackets, 60 plus, to have more exposure to property, more exposure to term deposits. They still feel downbeat about term deposits, upbeat about housing,” he said.
“It’s a really diverse bunch of answers when we split it by age and stage of life.”
He said the under 30s surveyed were focussed on other investments, particularly the share market, where confidence had lifted significantly over the past quarter, jumping to 21 percent compared with 13 percent in the previous quarter.
Overall, managed investments were steady at 14 percent and just under KiwiSaver, which had overtaken rental property and term deposits in perceived return.
Public shares were also gaining favour, with perceptions increasing to 12 percent.
Other options such as rental property, term deposits, and bank savings accounts remained stable, but were no longer seen as the stand-out choices they once were.
Global outlook
Global political instability or uncertainty remained the top concern for investors, with 90 percent citing it as a key factor, though there had been a notable drop in those ‘very or extremely concerned’, with fewer investors looking to adjustment their portfolios.
“Investors are adapting to a constantly changing global backdrop, and while the mood is more positive than last quarter, it is far from buoyant,” he said.
“In fact, 53 percent of those with concerns are now choosing not to make any changes – an improvement from last quarter.
“What we’re seeing is that investors are becoming more accustomed to uncertainty. Based on our customers’ behaviour, most are choosing to stay the course and not make changes to their portfolios, even as global headlines continue to shift.”
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
