NZ investor confidence hits 6 yr low in Q1 - survey

WELLINGTON, April 23 (Reuters) - New Zealand investor confidence tumbled to its lowest level in more than six years in the first quarter, hit by financial market turmoil, a slowing housing market and a weakening economic outlook, a survey showed on Wednesday.

A net 1 percent of respondents to the ASB Bank investor confidence survey believed their investment returns would deteriorate in the coming year, down from a net 19 percent who expected returns to improve in the previous quarter.

It was the third consecutive quarterly decline and the lowest confidence level since the fourth quarter of 2001.

"Sharemarkets have been weakened, the housing market is clearly softening, and there has been growing pessimism about the economy," said Jonathan Beale, ASB's head of investments services, in a statement.

Residential property remained the most favoured asset, although not as strongly as the previous quarter, with 19 percent of respondents expecting it to provide the best return, compared with 22 percent in the previous survey.

Data this month has shown the annual growth rate in house prices halved to 6.5 percent in March from 13.3 percent last August, while the number of sales was down 53 percent on a year ago.

Confidence in bank term deposits rose sharply to a record 16 percent from 12 percent in the fourth quarter.

"Possibly, the more uncertain economic environment is encouraging investors to place a higher weight on the relative security and certainty of term deposits, the higher interest rates now being offered also increasing confidence in this form of investment," Beale said.

The Reserve Bank of New Zealand raised the official cash rate four times last year to 8.25 percent on concerns over strong domestic spending, particularly in the housing market.

It is widely expected to keep rates on hold at its next review on Thursday as its concern over persistent inflation pressures overshadows slowing consumer demand. (Reporting by Kazunori Takada)