Australia
2019 Outlook for the Auckland market

2019 Outlook for the Auckland market

When forecasting the year ahead, those of us who have been in the market for a long time hope for the best but always assess the risks. There is never any shortage of dark clouds and turbulence in far off markets. While these markets do affect us, we trade in a local property environment influenced by continued high net migration and population growth, low interest rates, low vacancy rates and non-inflationary economic growth. This leads to demand in all property sectors. In the absence of an economic meltdown, how will these factors shape the Auckland property market in 2019?

Industrial property will be the standout investment category in 2019. Vacancy will remain at record low levels, along with a scarcity of suitable development land and increasing construction costs. Rents will continue to increase across the prime and secondary grades and we also anticipate some further yield compression.

CBD office property will continue to attract interest from offshore parties, with local buyers priced out of the market. Transaction numbers will be subdued as a result of limited available stock. 

Demand will continue to be less strong for retail centres and suburban office property, with the best transactions reflecting either high-yielding or add-value opportunities. Performance in the housing market will directly affect confidence in the retail property market. Indications of OCR cuts in 2019 may help residential sentiment to remain steady or possibly improve, despite the recent retraction in Australia.

Development opportunities will continue to be dominated by domestic demand, especially in the smaller scale, sub-10 hectare space. Pricing will be subject to influence from reduced sales volumes and price moderation of completed products. A material influence will be demand from parties seeking to deliver Kiwibuild opportunities.

We also expect to see continued improvement in the availability of credit in 2019, as several of the larger development projects (office and apartment) reach completion. 

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The team at Savills are experts in their respective fields, with extensive experience backed by 150 years of Savills industry knowledge. This makes us well placed to provide you with the most informed view of current trends as well as helpful guides and top tips across the commercial and residential property sectors.

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The team at Savills are experts in their respective fields, with extensive experience backed by 150 years of Savills industry knowledge. This makes us well placed to provide you with the most informed view of current trends as well as helpful guides and top tips across the commercial and residential property sectors.

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portunity">investment opportunity
  • costs
  • change
  • industrial
  • future outlook
  • office
  • development sites
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    About the Blog

    The team at Savills are experts in their respective fields, with extensive experience backed by 150 years of Savills industry knowledge. This makes us well placed to provide you with the most informed view of current trends as well as helpful guides and top tips across the commercial and residential property sectors.

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    If you have any comments or questions regarding the Savills blog just drop us a line.

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