Renewed confidence in the property market means cashed-up investors and owner-occupiers are poised to invest in the commercial sector if optimism continues, Tommy’s Group CEO Ben Castle says.
The calendar year is underway, and there is a growing sense of confidence permeating the property market as a whole. The recent election result and anticipated changes have sparked enthusiasm among stakeholders.
Ben Castle, CEO of Tommy’s Group, emphasizes the role of confidence in driving market dynamics, though he underscores that fundamentals remain paramount. “Despite high interest rates and slowed consumer spending, net migration trends are boosting confidence in lending, development, and investment,” Castle observes. “While confidence is crucial, its actual impact remains to be seen.”
Castle believes the market has likely bottomed out, supported by recent data indicating potential easing of interest rates sooner than expected. “There are investors and owner-occupiers poised with capital, ready to invest,” he notes. “If optimism continues, we may see an uptick in transaction volumes sooner rather than later.”
However, Castle points out that the quality of available properties in Wellington is a consideration for investors, particularly given seismic challenges. “There’s a clear call for local government to provide direction, especially regarding seismic ratings, which can significantly influence investment and development decisions,” he explains. “Clear guidance would stimulate activity in the short and medium term.”
Infrastructure issues in the capital, such as those affecting Let’s Get Wellington Moving and other projects, also impact property dynamics. “Managing funding direction is crucial,” Castle adds. “These initiatives could potentially enhance the market environment.”
Regarding work-from-home trends, Castle notes a potential shift back to office settings, which could benefit retail and hospitality sectors by reducing vacancy rates.
“This could lead to increased property values,” he suggests optimistically.
As the residential market shows signs of recovery with rising transactions and listings, Castle acknowledges that this revitalisation may take time to influence the commercial property sector. “However, positive shifts may be closer than anticipated,” he concludes.
Tommy’s Commercial continues to operate across all property sectors in the Wellington and Greater Wellington region, supporting clients with expert advice and market insights.
