Just 1% of investors surveyed over the June quarter expected investment conditions to improve in the coming year, according to ASB's latest Investor Confidence Survey.
Senior economist Chris Tennent-Brown says a flat housing market, sharemarket volatility and global geopolitical and trade uncertainty are weighing on investors' views.
Of the 780 investors surveyed, 51% said they were "very concerned" about the impact of global political instability or uncertainty on investments.
Of these, 47% felt this way about international geopolitical tension and conflict, and 43% about international trade policies, including tariffs. Half of those that had concerns had made, or considered making, changes to their investments as a result.
Tennent-Brown says these concerns were very high around April (at the beginning of the surveyed quarter). However, markets had improved a lot since, and the U.S. sharemarket is now trading around record highs.
While global and local issues were still weighing on New Zealand investors' minds, "it was pleasing to see confidence in managed investments lift over the quarter, although confidence in KiwiSaver did ease within the survey when investors were asked which investment they expect to provide the best return."
“It’s been a challenging six months, with markets affected by uncertainty around tariffs and global issues, alongside concerns at home, such as the housing market which hasn’t bounced back the way people expected it to.
"This has led to a more pessimistic tone in overall investor confidence, which seems to be suffering from the same weak sentiment we’re seeing in consumer confidence."
Confidence was highest among those aged under 39, and lowest among those aged over 60, partly reflecting where the different demographics tend to hold their investments and "where they are in the investment life cycle," Tennent-Brown says.
Sentiment fell across all regions, but was gloomiest in the lower North Island (-6%) and highest in Auckland (+10%).
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