New Zealanders have lost faith in property investment as a way to generate returns, amid wider uncertainty about the political landscape.
ASB has released its latest investor confidence survey, which shows a record 40 percent of people are “very concerned” about how local political uncertainty will affect their investments.
Another 46 percent were “concerned”.
More than half were also worried about global geopolitics and economics.
People were most confident in managed investments to generate the best return, followed by their own house and KiwiSaver.
Only 10 percent thought the best returns would come from rental property, a level near a record low. Only bank savings accounts were lower.
ASB senior economist Chris Tennent-Brown said it made sense that confidence in property investment had “plummeted” over the quarter, given the property market had been flat for a while and political parties had raised several policies that could affect the market in different ways.
People whose main investment was a rental property were significantly more likely to be very concerned about the local political outlook, he said.
“The status quo won’t mean a change but some of the parties’ policies of removal of interest deductibility, a land tax in another instance, all are probably … giving a sense of concern.
“At the end of 2025, we changed from thinking we’re in an easing interest-rate environment to potentially a rapidly … increasing environment. And we saw a flat property market.
“At the start of the year, there was optimism that the property market might start to pick up … That’s what we were forecasting. But now it’s dipped back down.”
Belief in the returns from the house people lived in had also drifted lower over time.
Overall investor confidence declined 5 percentage points to a net 1 percent.
Tennent-Brown said concern about offshore events related to “alarming” headlines.
“Locally it’s probably about the potential for change because there is such a wide range of policies out there for both property and KiwiSaver that are all feeding into the mix.”
Confidence in managed funds had improved while KiwiSaver declined, which he said probably highlighted concern about KiwiSaver settings as both funds would be performing similarly.
“We’ve seen sharemarkets perform incredibly well and that’s actually flowed through to KiwiSaver returns.”
But Tennent-Brown said the survey also showed that people were not making investment changes driven by their concerns, which he said was sensible.
“I think that the key thing is that the benefits of KiwiSaver are still there for employees to utilise and making sure that you’re in the right fund, and you’re focused on whatever your goal is … because elections do come along every three years. And they tend to throw up different ideas about what to do with things like KiwiSaver and the retirement age.
“But we can’t invest on a three-year basis for someone that’s got a long time to retire. So we have to look through this – as soon as we get our election out of the way, we’ll be also thinking about what’s happening in the midterms in the US. And then in another two years, there’ll be a full presidential election in the US.
“So there’s just always something coming along on the political front that you might like or dislike. But particularly for KiwiSaver, we’ve just got to focus on the long term. And that could be 30 or 40 years for some KiwiSavers.”
Sign up for Money with Susan Edmunds, a weekly newsletter covering all the things that affect how we make and spend money
