This country's commercial property sector stalled in the first quarter of this year, according to the Royal Institute of Chartered Surveyors (RICS).
The RICS New Zealand Commercial Property Monitor, which surveys commercial property professionals throughout the country, found that demand for commercial property from both occupiers and investors had stalled in the first quarter of this year.
"The impact of COVID-19 has stalled New Zealand's commercial property sector, with uncertainty over the long term impacts driving a steep decline in market confidence," the RICS report said.
"Demand for commercial property from both occupiers and investors has stalled to begin 2020, leading to a dive in sentiment amongst investors and occupiers over the past three months."
RICS Australasia Senior Economist Sean Ellison, said the survey found both rents and capital values were expected to continue their steep decline over the next three months.
Retail premises were expected to be the most adversely affected, with secondary office space expected to be more severely affected than prime office properties.
"The spread between primary and secondary assets is expected to widen significantly," Ellison said.
However RICS Australasia Managing Director Chris Nicholl, said the downturn did not appear to be as severe as it was during the GFC.
"There has been a steep decline in the optimism of commercial property professionals in New Zealand, however while sentiment is certainly taking a hit, the reaction does not appear to be as severe as it was during the depths of the GFC," Nicholl said.
"The result appears to be somewhat indicative of occupiers and investors maintaining a sort of holding pattern in Q1, given the uncertain duration of the Coronavirus lockdowns."
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