Index Update: 2021 outlook and emerging trends for the New Zealand Property Industry

Caleb Dunn
February, 2021

When New Zealand entered one of the strictest lockdowns in the world in March, much was still unknown about what lay ahead for the economy and the real estate sector. 

That decision helped the country to quickly mitigate the risks of a prolonged lockdown and resume many economic activities far sooner than other nations. 

While the rapid  “v-shaped” journey from recession to recovery has been lauded, with new community cases of COVID-19 emerging in early 2021, we are still far from an end to this time of uncertainty.

Flow-over effects from the residential sector

Extraordinarily low interest rates and a surge in New Zealanders returning home to a COVID-19 safe haven, combined with low housing stock have fuelled a booming residential housing market. 

As the affordability of housing comes under intense scrutiny, the pressure is mounting on the government to tackle the crisis. With interest rates likely to remain low and significant government spending set to drive economic growth, this will also drive strong demand for commercial stock as it strengthens off the back of a positive end to 2020.

Rent collection and landlord subsidies

The CREDIA Index measures rent collection in the commercial real estate industry and, by November 2020, rent collected within 30 days was up to 89.1% across all asset classes – only marginally lower than the same time in the year prior. 

There has been a steady uptick in rent collection since the year’s low of 65.9% in April, signalling a widespread return to business as normal for many tenants. As this figure tracks toward pre-COVID levels, we expect confidence among landlords to rise as well as new investment activity, especially in the industrial space, buoyed by the low interest rates. With investment vehicles, such as term deposits, providing minimal returns in this environment, and lending costs falling, investors are looking for greater returns. The industrial sector’s ongoing growth through COVID-19 will make it an appealing investment.

Unsurprisingly, the improvement in rent collection has been mirrored by a decrease in landlord subsidies across all asset classes with just 0.7% of rent credited in November 2020. This figure peaked at an extraordinary 14.3% in May, but when the country moved to level 1 in June, landlord assistance dropped sharply in the following months. 

Responsive service will be key

Whilst the normalising of rent collection and landlord subsidy levels indicate a swift recovery for the commercial sector, there is still the potential for New Zealand to enter another lockdown, as evidenced by the spate of recent COVID-19 cases in the community.

In the industrial sector, the explosion of online shopping means demand will hold strong for logistics and warehousing facilities, but being able to differentiate offerings through service and technology will be key. 

The same is true for the office sector as more companies look to provide flexible office arrangements as more workers split their time between remote work and the office.  

Go to the CREDIA Index | December 2020

For further details and visualisation of these key metrics, visit If you would like to discuss any of these trends or talk about how to better use data in your business, we would love to hear from you. You can email me at, or book in a discussion with the team here.

And finally for more details on our CREDIA Executive and CREDIA Stakeholder business intelligence products, check out the website here.

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