Regional price expectations high

The Property Institute’s latest poll of public perceptions of the housing market shows that sentiment about house prices is on the rise again.

This follows a noticeable decline in price expectations in the Institute’s last poll earlier this year.

Property Institute chief executive Ashley Church said the number of people predicting an increase in property prices over the next six months is up 5% to 55% since March.

At the same time, 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 where 56% expected increases and 8% decreases.”

The exception to this was Auckland where the poll shows there has been a big slump in price expectations.

Church said that in November 58% of Aucklanders were expecting house prices to rise – but last month that figure was down 12% to 46%.

But while fewer Aucklanders expect house prices to go up, many more of them are expecting prices to stay the same over the next six months, he said.

“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”.

In contrast to Auckland, other centres along with regional New Zealand were much more optimistic in their price expectations.

For example, 65% of Wellingtonians and 61% of Christchurch residents are expecting price rises.

Church said the difference between expectations in Auckland and other centres was due to the impact of latest LVR rules 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.

“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”.

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Decline in price growth optimism