For property investors interested in optimising their investments, the current economic environment is dishing up both challenges and opportunities in equal order. The specialist Property Brokers team has a wealth of knowledge and advice which can be incredibly helpful for property investors right now.
We spoke to Property Brokers’ Bay of Plenty and South Waikato regional manager Simon Short for the December 2022 Thought Leaders feature. At that time, we asked Simon, “Where is the real estate industry headed in 2023?”
His response at the time was very direct: “With interest rates now elevating, as expected, to offset inflation, I sense, like many, next year will be a year of further pricing correction and calibration.”
He felt interest rates would have the largest bearing on buyer confidence, stating, “Affordability is now a significant factor with capital gains no longer as prevalent.”
Fast-forward six months to June 2023, and his read of the anticipated 2023 market was obviously pretty well ‘spot on’.
Property Brokers’ story
Property Brokers has grown rapidly from humble provincial beginnings to now be New Zealand’s largest, fastest-growing provincial real estate brand.
As one of Heartland New Zealand’s largest real estate businesses, they list and sell an enormous amount of provincial property, whether residential, rural, lifestyle, commercial or industrial.
Bay of Plenty Trends 2023
Property Brokers now has offices across the Bay of Plenty in Whakatane, Rotorua, Te Puke, Papamoa, Tauranga, Tauriko, and Te Puna.
The company has established seven offices across the Bay of Plenty region in the last three-and-a-half years.
“We have great people who care about adding as much value as possible for our clients. Our number one objective is to give all Bay of Plenty property owners the very best service we have to offer.”
Simon believes there is a real awareness of Property Brokers across the Bay of Plenty now.
“We envisage that will continue as more people come to appreciate the strength we offer right across the nation. We are not franchised; therefore, our emphasis is always on connection and adding as much value as we can to benefit those around us.
Rural property perspectives
We asked Property Brokers’ Bay of Plenty and Northland rural manager Ian Morgan about the outlook for rural investors.
He feels Property Brokers offers rural buyers and sellers a real advantage – “Property Brokers’ rural team brings a wealth of experience and understanding to the information required to make an informed decision to any farming investments.”
His advice to those investors buying and those selling in the sector: “It is always about timing, and presently the Agri sector looks a very attractive proposition with quality produce diminishing globally. But rural is a long game, and the investor needs to be clear about this.”
Regarding the challenges and opportunities for rural investors in the year ahead: “Although the immediate challenges, particularly the weather, have been uncontrollable, and that has and will continue to have a significant impact in terms of production in the near future, opportunities will be plenty, and the Agri sector is well poised to deliver results in the future.
Commercial property investment potential
When asked this week, “Why is Property Brokers a great choice for commercial property investors interested in optimising their investments today,” Waikato and Bay of Plenty commercial manager Alan Copeman was immediately forthcoming: “We’re a family of lateral thinkers, industry specialists and playmakers who know that commercial sales and leases are the result of helping businesses and individuals succeed. Our market intelligence and regional knowledge translate into real results for our clients.”
His key advice to investors: Ensure that you allow for interest rate movements and that you are not over-committing in borrowing.
Alan believes interest rates will continue to put pressure on the yields investors are looking for. He anticipates that as building costs start to level, this will improve the situation in the new build space, ensuring an easing of the upward pressures on rental rates.
Industrial property investment update
Philip Hunt, the company’s commercial and industrial consultant in Tauranga’s fast-growing Tauriko industrial area, is adamant that although commercial retail is slow – a bi-product of changing consumer habits resulting from lockdowns and increased online shopping volumes – industrial remains the darling of the sectors. This can be evidenced by the doubling in size of his Tauriko team in the last year.
“We’re getting 4-5 tenancy enquiries daily now that Tauriko can offer real economies of scale. Businesses are desperate to relocate to Tauriko now the roading and infrastructure are in place,” he says.
“I’m loving being here – for me, it’s about the relationships, not the transactions. I just want to look after people.”
Philip says that although there is limited support for investors from financial institutions unless they are well established, tenancy enquiries are booming at the moment.
His advice to prospective tenants is, “Don’t take too long to commit – you risk missing out!”
He estimates 60% of his clients are Port-related businesses. He praises the Port of Tauranga for its foresight: “They have enabled us to build a bubble of positivity.”