Public servants now at their desks more than half the time (Source)

According to an office occupier sentiment survey by CBRE, government or council employees are in the office three days a week, with Wellington employees being present more than their Auckland counterparts.

Looking at 160 corporates (31,000 staff) across 428,000sqm of office space and 18 business sectors, showed that New Zealand employees were spending 3.3 days in the office per week, a slight increase on last year which was 3.2 days.

The legal sector was the most present at 4.1 days. Aucklanders were present 3 days per week, Wellington 3.3 days, and Christchurch 3.8 days.

Getting employees to spend more time working in the office is a focus of the government as it impacts CBD businesses who rely on custom along with the belief that it impacts business productivity. From a real estate perspective, 91% of the workplaces surveyed utilised hybrid working - something that CBRE workplace consultant Kirsten Cooper suggests may be fine-tuned to see a reduction in WFH practices by 15% of respondents.

With more people being asked to return to the office, there is a flow-on effect to the commercial property sector, with those who have reduced their office footprint potentially seeking larger floorplates again, bringing some buoyancy to the office leasing market.

Our perspective: - call us old-fashioned, but we have a work-from-the-office policy. As a small team, we find the collaboration that happens when we are in the office is enormous - something that can't be replicated working remotely. 

Why can't we get the kind of long-term mortgages with low break fees common in the US? (Source) 

The USA has 30-year terms for mortgages but in New Zealand, almost nothing is fixed for more than five years.

According to the CEO of ANZ Antonia Watson, New Zealand’s options are more limited due to the interest rate risk for banks with long-term fixes. The USA has the scale and size to hedge and protect itself against future interest rate movements, but few other countries do.

In the USA at the moment a typical 30-year interest rate fix is about 6.75 percent.

New Zealand bank TSB has offered a 10-year rate before of 5.95 percent but there was not a great uptake of it even when, at the time, BNZ was offering a seven-year rate of 6.89 percent, and the average three-year rate was 7.49 percent.

Break fees are another factor, in the US customers can break a 30-year fix easily, but in NZ a break fee must be paid, and this is calculated according to the time left on the fixed term, the interest rate the customer agreed to pay, and market rates.

Where political parties stand on the capital gains tax (Source) 

CEO of ANZ Antonia Watson believes New Zealand needs a capital gains tax (CGT), a stance which was not well received by NZ Prime Minister Christopher Luxon who implied that it was cheeky of an Australian CEO to state that more money should be taken off New Zealanders. He also commented that you cannot tax your way out of a recession.

NZ Finance Minister Nicola Willis believes a capital gains tax would put people off investing.

Our perspective: Ardern/ Robertson floated the idea of CGT but pulled back after the angry response. Does that mean Luxon wouldn’t do it? Crown debt has risen massively and if National gets a second term would they attempt it? Don’t rule it out...and don’t freak out. Look at Aussie – they have stamp duty and a CGT and it hasn’t stopped people buying and prices going up.

Negative gearing, capital gains tax: Albanese confirms reform options are under review with Treasury (Source) 

Albanese said he hasn’t been convinced yet that curbing negative gearing and capital gains tax deductions for investors would improve housing supply and affordability.

Rents down, options up: Good news for tenants (Source) 

Following a drop in immigration there is less competition in the market for renters at present, with Trade Me reporting that asking rent prices had stabilised in August following two months of declines.

Median weekly rent is $640, and prices are 3.2% higher than in August 2023, with Auckland and Bay of Plenty being the most expensive regions at $675 & 670 respectively.

Rental listings are up 38% compared to the previous year. Demand is down 13% compared to July and 36% compared to 2023.

Rents are increasing in Otago, up 4.8% between July and August and year-on-year rents were up 16.1%. Median rental prices in Queenstown Lakes are $950 per week. However, with increasing supply in the Queenstown Lakes district, it will be interesting to see how this impacts rental prices.

Canterbury rentals are also rising with record high rents for two months in a row, with median weekly rent up $30 over the course of a year.

Have a fabulous weekend!
From the team at Erskine Owen.