Overseas investors are agressively buying New Zealand commercial property and pushing prices out of the reach of local buyers, commercial real estate broker CBRE says.
Photo: RNNZ /Maja Burry
The firm's review of the New Zealand market for last year showed a significant uptick in overseas interest in this market, with foreign investors taking more than 40 percent of the sales, worth about $1.7 billion.
CBRE executive chair Brent McGregor said about three quarters of the investment had gone into the Auckland property market.
"Unlike previous cycles there is now a meaningful depth of foreign capital mandated for New Zealand investment," he said.
The attraction of New Zealand was the strong economy, good property offerings, and yields that were better than in other markets.
This saw local property sellers do well from the higher prices which were likely to continue in the medium term, but it was forcing local buyers to lower-grade properties or those needing work, Mr McGregor said.
"They're looking at different types of deals, perhaps where they have to put some refurbishment capital into it or some sweat equity into these assets, global groups aren't geared up to look at such transactions."