Investors' love affair with housing has lifted confidence and dimmed perceptions about other types of investment.
Photo: 123rf
The latest quarterly ASB Investor Confidence Survey has found renewed confidence in the housing market with investor confidence rising a net 3 points to 11 percent.
Investors felt their own homes provide the best return on investments - rising to a net 22 percent from 19 percent in the September quarter, with Aucklanders feeling much more positive about their own homes.
ASB senior economist Chris Tennent-Brown said the overall increase in confidence was encouraging, but the details behind the lift were slightly disappointing.
"The spring burst we've seen in the housing market has boosted confidence, but I really struggle with the idea of investor confidence being driven by an investors' house rather than things like KiwiSaver, the share market or investment property," he said.
"It's problematic, because we know that simply relying on your house going up in value isn't an investment strategy."
The view of rental property as providing the best return dipped, falling to the lowest in more than 15 years at 13 percent.
"The lift in the housing market, signs of increasing rents, and low interest rates don't seem to be offsetting some of the other issues that rental property investors have faced over recent years," Tennent-Brown said.
"Nevertheless, there is still a core group of investors who continue to believe and invest in rental property - it's just smaller than the survey showed in earlier years."
Investor confidence in Auckland trailed the rest of the country, rising marginally to a net 6 percent, lagging markedly behind Wellington's 21 percent optimism.
A net 13 percent picked KiwiSaver as giving the best investment, with 8 percent choosing managed funds and term deposits.
Tennent-Brown said it had been good year for investments, with strong returns for a number of funds, while the share market gained more than a third in value over the past year.
"It would be nice to see those returns flowing through to an increase in confidence in KiwiSaver and managed funds over term deposits, which are paying very low rates these days," he said.