The bank has released its latest investor confidence report for the June quarter, which showed that 28% of people felt the returns on their investments would improve in the next 12 months, 13% thought they would worsen and 40% expected them to remain the same.

“This is middle of the road investor confidence overall, and that’s okay, but given the positive developments of late, it’s a little disappointing. Interest rates are at a record low, you’ve never been able to borrow money cheaper, the capital gains tax cloud is gone, and the share market is trading at a record high. Given that backdrop you would think people would be more upbeat,” Tennent-Brown said.

Perceptions about housing in particular deteriorated.

The perception of an investor’s own home providing the best return on investment softened, dropping from 22% to 20% nationwide, and from 26% to 22% in the regions, while Auckland remained stable at a lower 15%.

Overall, perceptions of rental properties as providing the best return on investment remained at 15% – a four-year-low. In Auckland this increased slightly from 20% to 21% but dipped in the regions from 13% to 12%.

When it came to views on the best return by bank product, KiwiSaver led the pack with 13% viewing this as the best product for return on investments.

“It is pleasing that KiwiSaver is the top of the pile in terms of expectations of returns, because we have seen some really strong returns for KiwiSaver this year, and the past quarter was particularly good,” Tennent-Brown said.

“Drilling into the details, it’s also pleasing to see that the age group where perceptions about KiwiSaver providing the best returns, out of the bank products, is strongest in the 40-to-60-year-old age group, where we would expect people to be at the peak of their earning and saving power. Their balances are likely to be relatively high, so the market movements are more noticeable. It’s really encouraging to see the higher confidence in this age bracket.

“On the other hand, the perception of shares providing the best return has also ticked up, but not by much.

“Given the local sharemarket has provided amazing returns this year, and is at a record high, it’s disappointing that perception about the sharemarket providing the best returns has only risen from 8% to 10% this quarter.

“For some reason the strong market performance isn’t making people think that shares will provide the best returns – 10% of respondents is within the range of where it has been for the last five years. We would have thought more respondents would have picked the sharemarket as the investment that will provide the best returns given how well it’s gone over those five years. It just seems that Kiwis can’t get confident about the sharemarket, which is a pity given the strong returns that have been generated over a long time now.”