2017 uncertain for house prices, with mixed expert views

UPDATE: 2017 uncertain for house prices, with mixed expert views

UPDATE: 7th par, clarifies that price growth of 12.2% is the Auckland market, rather than the national picture.

By Edwin Mitson

Jan. 13 (BusinessDesk) - If you're not sure about which way the housing market is going to go in 2017, bear in mind the experts remain pretty divided too.

In its housing predictions for 2017 published this morning, the Property Institute, which represents valuers and property managers, suggests it believes housing prices will keep rising.

Ashley Church, chief executive of the Institute said in a statement that the current lull in the Auckland market simply reflects the impositions of restrictions placed on investors by the Reserve Bank in October 2016.

"The continuing gap between demand and supply means that further price inflation is inevitable for the foreseeable future."

The institute says that while price inflation will likely run into double digits, it will still be lower than the highs seen in the last couple of years.

However, this contrasts with ASB's look at the New Zealand economy, which was also published on Friday morning. In it, the bank's economists say they "expect the housing market to glide into a soft landing. While we expect the housing market to cool, housing prices should still have a floor on them."

The most recent data from state-owned valuer, QV, found prices in Auckland had increased by 12.2 percent in December compared to a year earlier, the slowest rate of growth since January 2015. However, spokesperson Andrea Rush warned that the Auckland market in 2016 had been slow over the summer, before picking up again in March.

Nationally QV said December showed a continuation of the trend of slowing growth in house price values, activity and demand, mainly due to the imposition of lending restrictions on property investors by the Reserve Bank.

(BusinessDesk)

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