Commercial property yields are currently about 1.5 percentage points above bank rates, making investing in commercial property attractive to investors. There is a strong occupier demand in Auckland and Christchurch, however many developers have chosen not to invest as the rent they would need to charge to make a return would be unaffordable to potential tenants.

 

New Zealand economy is expected to slow down in 2018, which may mean higher vacancy rates in lower grade buildings.

 

Reference:  Westpac Industry Insights June 2016