Rebound in price expectations – except in Auckland

Media Release
9 May, 2017

Property Institute Poll confirms rebound in price expectations – except in Auckland

Property Institute of New Zealand Chief Executive Ashley Church says the Institute’s third poll of public perceptions has revealed a sharp rebound in house price expectations.

He says the latest poll, which was conducted during April and follows polls in November 2016 and March 2017, shows that sentiment about house prices is on the rise again after a dip in expectations during the early part of this year

“The number of people predicting an increase in property prices over the next six months is up 5% to 55% since March. Those expecting prices to decrease has dropped 5% from 12% to just 7%”.

“This means that expectations have rebounded to figures that closely match our November poll (56% increase & 8% decrease) – except in Auckland where there has been a big slump in expectations. Back in November 58% of Aucklanders were expecting house prices to rise – but last month that figure was down 12% to 46%, unchanged from our March poll”.

“But the national figure is bolstered by stronger sentiment in other centres and regional New Zealand”.

Mr Church also notes that Aucklanders, while less bullish about house price increases, are still not buying into talk of a ‘correction’ in house prices.

“While fewer Aucklanders are expecting house prices to increase – significantly more of them are expecting them to stay the same over the next six months. That figure has increased from 29% in November to 46% in our April poll. Only 6% of Aucklanders are expecting house prices to drop”.

“This indicates a real shift in perception, particularly in Auckland, with now the same number of people expecting increases as there are people expecting prices to stabilise”.

Mr Church puts the difference between expectations in Auckland and other centres down to the impact of the Reserve Banks Loan-to-value restrictions coupled with the actual price of a house in other parts of the country.

“The LVRs affect the entire country – but the actual cost of buying a house in Auckland is dramatically higher than in most other parts of New Zealand – so I’d put most of the difference in sentiment down to investors looking for better yields and locations where they can still afford to buy”.

HEADLINE RESULTS

* Age group breakdowns show that young people are most bullish about increases (63% vs 54% in March), and the over 60’s are the most likely to expect a decrease (11% vs 16% in March).
* Wellingtonians are the most likely to be picking property price rises (65%), followed closely by Christchurch (61%).
* From a political stand-point the poll says New Zealand First voters (65%) were most likely to nominate property price rises, followed by Green voters (61%). While in March New Zealand First supporters were also the most likely to predict a decrease in prices over the next six months, Labour supporters are now most likely to be picking decreases 11%. National supporters (43%) were most likely to pick prices to stay the same.

NOTE: The poll was conducted by Curia Market Research in April and has a 3.2% margin of error. The polling results are attached – 3 pages.
Property_Institute__Poll_Results_April_2017.pdf

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