REINZ says invest super in NZ

New Zealanders should be prepared to back themselves with their superannuation savings rather than send savings offshore, according to the new national president of the Real Estate Institute of New Zealand.

Graeme Woodley says that as New Zealand moves towards a government-run compulsory savings scheme there is pressure to spread the risk of a single fund by investing internationally.

"But I wonder about the logic of that, surely if we don’t have the confidence to invest in our own economy then we have to do some soul-searching," he told the institute's annual meeting in Rotorua.

"Countries like Singapore have been intensive ‘self-investors’ and I believe the Singapore superannuation scheme is an important factor behind the so-called ‘Singapore Economic Miracle’."

"If a significant pool of capital was available to invest in New Zealand business and industry, not only through the sharemarket, but also in infrastructure, then our low growth economy will receive the impetus it needs."

Woodley says as a country desperately short of investment in infrastructure, New Zealand should consider issues such as the Auckland roading problems.

"We are a nation of ‘home investors’ not just in the literal sense but in terms of preferring to invest in our own country’s businesses and industries. There are no shortage of international fund managers who will try to justify the proposition that we should spread our risk, but I wonder whether it is not time for this country to concentrate its risk, instead."

Woodley also defended the New Zealand property-based savings ethic.

"Residential property provides a very low risk form of saving and it’s an investment which many New Zealanders know, understand and can relate to."

"Whether it involves simply paying off the mortgage or investing in residential rental property, or commercial, industrial or rural property, by leveraging the savings in the family home, it is nevertheless a form of savings ethic and should not be criticised."