Business & Investing:  The house sales boom sets a new record for the Auckland market leader, Plus IMF upgrades the outlook for the global economy

Auckland’s leading real estate agency, Barfoot and Thompson, said March was the company’s best trading month ever.

While March is traditionally its strongest month anyway, Barfoots managed to add 2,138 new listings – the highest number for 15 years and about a quarter higher than it would normally list, it said.

That also saw the mean sale price continue to push higher above $1.1 million, 2.7 percent up on the average for the prior quarter and 11.5 percent year-on-year.

Managing director Peter Thompson said the agency had sold a record 1,844 homes in March brining total sales for the first quarter to 4,054 homes.

Rents to rise according to new survey of landlords

A new survey of landlords conducted since the government removed interest deductibility on residential properties has revealed more than 74 percent expect to raise rents in response.

The NZ Property Investors’ Federation survey shows more than 90 percent of the more than 1700 respondents said they will be affected by the new policy and three quarters of respondents said the main way they would respond would be to raise rents.

A further 9 percent said they might consider raising rents.

On average, respondents said they planned to increase rents by between $21 and $30 a week.

IMF upgrades its outlook for global economy

The International Monetary Fund has upgraded its outlook for the global economy, saying the rollout of Covid -19 vaccines and vast sums of government aid will accelerate global economic growth to a record high this year in a powerful rebound from the pandemic recession.

The lending agency said it expected economic growth to expand 6 percent in 2021, up from the 5.5 percent it had forecast in January. If the IMF forecast turns out to be correct it would be the fastest expansion for the global economy since its earliest records began in 1980.

In 2022, the IMF predicts, international economic growth will decelerate to 4.4 percent, up from its January forecast of 4.2 percent.

The agency’s economists now estimate the global economy shrank 3.3 percent in 2020 after the devastating recession that followed the coronavirus’ eruption across the world early last spring. That is the worst annual figure in the IMF’s database.

Without $16 trillion in global government aid that helped sustain companies and consumers during lockdowns, IMF forecasters say, last year’s downturn could have been three times worse.

The US economy, the world’s biggest, is now forecast to expand 6.4 percent in 2021 — its fastest growth since 1984 — and 3.5 percent in 2022.

The world’s second-largest economy, China, which imposed a severe Covid-19 clampdown a year ago and got a head start on an economic recovery, is expected to record 8.4 percent growth this year and 5.6 percent in 2022, the IMF estimates.

The monetary fund expects the 19 countries that share the euro currency to collectively expand 4.4 percent this year and 3.8 percent in 2022, while Japan is expected to register 3.3 percent growth this year and 2.5 percent next year.

Aussie sharemarket finally gets back in the black since start of Covid

Australian shares are back at their highest since the Covid market plunge nearly 14 months ago, after technology, property, and energy firms provided a fourth straight session of gains.

The benchmark ASX 200 finished Wednesday’s trade 0.6 per cent higher at 6928, its highest close since February 24 last year when stocks were in the early stages of pandemic freefall.

It’s just the second time the market has finished above 6900 points since the coronavirus wiped 39 percent from the index in the steepest bear market in history.

Travel stocks continued to make gains following yesterday’s trans-Tasman bubble announcement Qantas shares rose 2.7 per cent to $5.49, while Flight Centre gained 1.5 per cent to $18.94.

The Big Four banks each finished higher, while Afterpay and EML Payments drove a fourth day of tech sector gains.

US shopping malls becoming overwhelmed with vacancy rates

US shopping malls, once the bastion of retail shopping, are becoming increasingly empty as Americans switch to doing their shopping online.

The vacancy rate for regional malls in the United States hit a record 12 percent in the first quarter of 2021 up from 10.5 percent in the fourth quarter of 2020, according to Moody’s Analytics’ commercial real estate division.

The increase marked the highest vacancy rate on record, surpassing the record 80 basis-point spike in the first quarter of 2009, at the height of the Global Financial Crisis.

The US has about 1,000 malls and shopper traffic to many enclosed malls, often situated in the suburbs, has been steadily dropping over the years, with Covid accelerating the trend.

Many of Americas biggest retailers within malls, including department stores, have increasingly struggled to stay relevant with their customers. Last year saw several mall-based businesses –  including J.C. Penney, Neiman Marcus, Lord & Taylor, Brooks Brothers and J.Crew – file for bankruptcy protection.

Industrial real estate has been the most resilient property type, with demand for warehouses that store goods and fulfil e-commerce orders surging. Rents for warehouse and distribution properties across the country have not turned negative, so far, according to property analysts.

Office space, like retail, continues to see heightened vacancy rates and declining rents. Many businesses are still grappling with what the future of workspace is going to look like. Many companies are considering culling their office footprints and allowing employees to embrace working at home, at least part of the time.

Forty-eight of the 79 U.S. metro areas that Moody’s tracks suffered effective office rent declines in the first quarter, with New York and San Francisco office space particularly hard hit.

Andrew Patterson is Newsroom's Markets Editor and has worked for decades as a financial journalist, radio presenter and editor with Australia's ABC, Radio Live and NBR.

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