Low interest rates spark resurrection

The dramatic fall in interest rates over the past few months has helped to kick life back into the commercial and industrial property agency business, says Chris Bayley, general manager commercial and industrial for Bayleys Real Estate.

"It remains to be seen whether this continues, given the challenges the New Zealand economy will face from the global downturn this year, but it's been an encouraging start to 2009."

Bayley says a lot of the renewed inquiry is coming from investors who have had substantial funds parked in the bank and have witnessed their income returns almost halved in a matter of a few months.

"They are looking for alternatives and in an uncertain investment market like we have at present, there tends to be a bit of a retreat into 'bricks and mortar' because of the stability that property provides."

Stuart Bode, commercial investment team leader in Bayleys' Auckland office, says several of his clients who are borrowing are opting for floating rates, anticipating that continuing falls in interest rates mean they will be able to lock into a fixed rate of closer to 5 per cent later in the year.

To read the full NZ Herald article click here

Posted: 14 Mar 2009

News articles