Local business confidence takes knock with new government

Some proposed policies by the new government could affect the property market. Photo/File

A lull in business confidence, the fear of adverse risk due to change and a possible flight of property investors are some of the concerns raised by city leaders as the new government takes the reins.

Professionals McDowell Real Estate co-owner and principal Steve Lovegrove said he would wait, like others, with bated breath as there was a lot of talk about change and new policies.

Likely changes to the Reserve Bank Act after NZ First leader Winston Peters did not get his wish to implement a drastically different model based on the Singaporean model, could have an impact.

"I think it will be interesting to see the outcome in the investor market. Will investors take flight and get out of their investor properties or will they just bolt down for three years?

"They are either going to [take flight] or they will adapt to what suits their circumstances.''

With change came fear and with fear came risk, he said.

"I suspect people will become very risk adverse until they are more certain ... and that might take some months to settle down and I hope the effect will be positive.''

LJ Hooker Rotorua principal Malcolm Forsyth said in his view the Labour government wanting to restrict the housing boom by banning overseas investors would be detrimental.

He was responding to Labour and NZ First's proposal to restrict sales of residential land and farmland to New Zealand citizens, permanent residents who live in New Zealand and companies that were majority New Zealand owned.

"Sure enough put some restrictions on it but maybe let's have a look and see what you have in mind, not a complete ban.''

Rotorua Chamber of Commerce president John McRae said an overall expectation from the business community was that it would be business as usual with National.

The dollar dropping was probably a response to that which may lead to a temporary lull in business confidence, he said.

"The reality is the New Zealand economy is so strong at the moment that in my personal view it will bounce back pretty quickly.'

"The business community is extremely resilient, innovative and creative and it will be the economic engine that drives this city and country no matter what.''