The Property Institute has released the results of a poll on public perceptions about the property market and it throws up some interesting findings.
Just how much of an impact foreign buyers may be having on the property market and prices has been the subject of much debate.
Land Information New Zealand (LINZ) data might show that people with overseas tax residency have accounted for around 3% of the country’s property sales over the past three quarters.
But the poll results indicate, once again, that popular opinion holds that the influence of foreign buyers goes far beyond the level of the LINZ data.
Property Institute chief executive Ashley Church said the research measured the perceived impact on property prices of five price influencers.
These were foreign investors, local investors, immigrants, central and local government and banks.
Church said participants selected foreign investors as having the largest impact, followed by banks and domestic investors.
Central and local government were perceived to have the least impact on property prices and immigrants were second to lowest, he said.
“Geographically, by gender, political persuasion and age group - ‘foreign investors’ were nominated across the board as having the ‘biggest impact’ on property prices.
“The exceptions to this were Green Party supporters who believe the banks have the same impact on property prices as foreign investors.”
Church, who was surprised by this result, said that while the views expressed aren’t necessarily right, they are an important barometer of market sentiment and a guide to buyer behaviour.
The poll research also asked participants whether they thought property prices would increase, decrease or stay the same in the next six months.
A majority (56%) of participants thought that property prices will increase for at least six months, while 28% thought they will stay the same and just 8% thought they will decrease.
When it came to a geographic breakdown, 62% of Wellingtonians, 58% of Aucklanders, and 46% of Christchurch locals expect property prices to increase in the next six months.
Those most likely to pick a decrease were in towns (10%), followed by Auckland (9%) and provincial cities (8%) and rural areas (8%)
However, 40% of Christchurch locals thought property prices will stay the same.
Church said the research showed that while participants seemed to differ on the causes, most aren’t buying into recent talk of an imminent market crash.
The large majority of people also share our belief that a sharp price correction in the housing market is unlikely, he said.
“That would tend to confirm our view that the current price slow-down in the Auckland property market is being driven by the Reserve Bank’s LVR restrictions, rather than any loss of confidence in the Auckland market”.
Labour Party housing spokesperson Phil Twyford said the research showed the public puts much of the blame for the housing bubble at the feet of foreign speculators.
“It also shows that the public thinks the government is having relatively little impact on house prices compared to other factors – despite its attempts to ease house price rises.”
The next Prime Minister should listen to the public’s concerns and ban foreign speculators from buying existing houses in New Zealand, Twyford said.
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