Fund watch

New Zealand property sector outlook

Australasian property has been a mixed bag over the past two to three years, with the New Zealand market struggling against the backdrop of a slowing domestic economy and a rapid increase in the OCR by the RBNZ.

Meanwhile, the Australian property market has been one of the better-performing global property markets. Despite the RBA maintaining a relatively hawkish bias, the sector has benefited from a stable interest rate environment, and companies have been able to adapt to the higher interest rate environment.

As we look ahead, the prospect of further interest rate cuts in New Zealand should support the property sector. Steady cash flows, which the property sector offers, make it more attractive as interest rates fall, while it also improves the valuation of underlying assets. Moreover, we should see a pick-up in transactions as borrowing costs decline.

Finally, whatever the economic backdrop, we remain focused on investing in quality listed property companies with strong management, robust balance sheets and a clear strategy for growing shareholder value. We believe this philosophy will put our investors in the best position to grow their investment portfolios.

This article has been prepared by ANZ New Zealand Investments Limited (‘ANZ Investments’) for information purposes only and it should not be treated as financial advice.

MFL Mutual Fund Limited is the issuer and manager of the MFL Mutual Fund. ANZ Investments is the investment and administration manager. ANZ Investments is not an authorised deposit taking institution (ADI) under Australian law and investments in the scheme aren't deposits in or liabilities of ANZ Bank New Zealand Limited, Australia and New Zealand Banking Group Limited, or their subsidiaries (together 'ANZ Group'). ANZ Group doesn’t stand behind or guarantee ANZ Investments. Investments in the scheme are subject to investment risk, including possible delays in repayment, and loss of income and principal invested. ANZ Group won’t be liable to you for the capital value or performance of your investment.

Past performance does not indicate future performance, and performance can be negative as well as positive. This material is for information purposes only. We recommend seeking financial advice about your situation and goals before getting a financial product.