KEY POINTS:
The housing market's continued resilience and healthy returns from managed funds and equities have lifted New Zealanders' investment confidence to a historic high.
ASB Bank's Investment Confidence Report shows investor confidence rose 5 percentage points to a net 24 per cent in the three months to December, matching
the survey's previous peaks achieved in late 2003 and early 2005.
Any positive figure means optimists outnumber pessimists.
After increases in each of the preceding three quarters, the increase in the December quarter was due mainly to a drop in the number of pessimistic investors - those who expected their investment returns would be lower over the next 12 months. There was also a slight increase in those expecting better returns over the next year.
Investment confidence has now risen by 15 percentage points over the past 12 months. Over the same period the New Zealand sharemarket's benchmark index rose by more than 20 per cent, which was still less than most overseas markets. The national median house price rose almost 12 per cent last year to $330,000 according to the Real Estate Institute.
Balanced managed funds, which invest across a number of asset classes, returned on average 14 per cent after tax and fees last year, said industry research firm Fundsource.
"It seems there is enough good news across a range of asset classes both locally and overseas to encourage those with investments," said Jonathan Beale of ASB Investments.
Fundsource general manager Binu Paul said: "People's exuberance is fundamentally based on the fact that the property market hasn't been subdued ... in fact it seems to have picked up."
Residential rental property remained the highest-ranked asset class for returns among the survey's 720 respondents, but confidence in managed funds rose after falls over the preceding two quarters.
Paul said that increasing confidence was reflected in more money going into managed funds over the past two quarters after a sustained period of net outflows.
He attributed that to healthy returns from funds and changes to their tax treatment later this year, which will put them on a more equitable footing with direct investment.
Confidence in direct sharemarket investments also rose over the December quarter.
"This reflects good performance from the equity markets, both locally and overseas," said Beale.
First NZ Capital's Auckland head of investor services, Martin Poulsen said the report's findings were consistent with his firm's experience.
"We are definitely seeing more business and we're seeing a growth across all of our businesses.
"We have seen the benefit of clients who have done very well in the property market or sold a business take a little bit of money off the table and allocate it to the money market, fixed interest assets or low-risk equity portfolios."
