Investor confidence has fallen to a two-year low with low interest rates being blamed.
The main reason for the drop investor confidence is low interest rates on term deposits, while confidence in the property market remains strong. Photo: 123RF
ASB Bank's latest survey shows the number of investors who think the rate of return on investments will improve over the coming year has dipped to a net 16 percent in the second quarter from 21 percent three months earlier.
The main reason for the drop is low interest rates on term deposits, while confidence in the property market remains strong.
ASB senior wealth economist Chris Tennent-Brown said the low interest rate environment was taking its toll.
"Expectations regarding term deposit returns eased, which makes sense given how low term deposit returns have been."
"The survey took place before the recent trims to some bank rates, and the RBNZ's most recent official cash rate announcement, so we could see further weakness in this area in the next quarter too," Mr Tennent-Brown said.
The family home remained the asset seen offering the best return, with nearly a quarter of those surveyed putting it top.
But rental properties remained strong with 18 percent, well ahead of term deposits, which dived four percentage points to 9 percent.
Mr Tennent-Brown said it was disappointing to see investors having so little faith in KiwiSaver and managed funds compared to term deposits which offered smaller returns.
"It's been an amazing few years for sharemarkets, which is great for share investors, and the sharemarket gains have flowed through to really good returns for a number of growth-focused funds found in KiwiSaver schemes and managed funds," he said.