ASB Investor Confidence Survey

Media release
ASB Investor Confidence Survey Q3 2010
9 November 2010

Term deposits soar ahead of rental property in investor confidence stakes

• Recent events in the South Island have impacted investor confidence
• Term deposits lead investor preferences, reaching near record levels of popularity
• Confidence level unchanged for rental property and bank savings accounts  

ASB’s Investor Confidence Survey has shown a 4 percentage point decline to a net 15 percent over the September 2010 quarter.

“Overall investor confidence has dropped, with a sharp dip of 7 points in the month of September alone,” says ASB’s Acting General Manager Private Banking and Wealth Management, Jonathan Beale. “It is not surprising that our results show investor confidence falling back, with the triple hit of the Canterbury Earthquake, the Southland storm and the continued unravelling of South Canterbury Finance taking their toll.”

Term investments continue to lead investor preferences

As investors look to security and predictability, the popularity of Term Deposits as the investment that offers the best return has soared to near record highs.

Mr Beale says 20 percent of respondents now view Term Deposits as providing the best return, just one point below the highest scores seen in this survey back in 2008. “Before the financial crisis, Term Deposits languished well below Rental Property as the investment that offered the best returns. However over the past two years the two investment classes have had more mixed fortunes. Intense competition in the market for Term Deposits is also likely to be having an upward impact,” says Mr Beale.

Rental property remains flat

Rental Property remains equal with Bank Savings Accounts at 14 percent.  “Rental Property remains at its lowest level since late 2002, indicating that investors may now be opting for more certainty in their investment choices.”

“Rental Property has dropped from the dizzy heights of the boom, with perceptions of rental property as an investment class that offers best returns being more volatile over the past two years,” Mr Beale says.

“Last quarter we saw rental property drop three points in popularity to 14 percent following the changes to tax on property.  Property prices also remain flat across much of the country so investors may well be feeling cautious about the returns offered in the post-recession housing market.”

This quarter Managed Investments increased by 1 point to 11 percent, with KiwiSaver stable at 9 percent and Shares in Public Companies down 3 points to 5 percent.

ENDS

The full media relaese with graphs is available here