Decline in price growth optimism

Expectations that property prices will just keep raising have dropped noticeably over the last few months, a new Property Institute poll shows.

Wednesday, March 15th 2017, 12:00AM

by Miriam Bell

The Institute has just released the results of its second public perceptions poll and it reveals a definite softening in price expectations in the three months since the first poll.

Property Institute chief executive Ashley Church said the number of people predicting a decline in property prices over the next six months has increased from 8% to 12%.

Further, the number of people who thought property prices will keep rising in the next six months dropped to 50% from 56% in the first poll.

Church said the number expecting price rises to continue is still high, but reflects a softening in expectations in line with other recent data.

The number of people expecting prices to stay the same has gone up from 28% to 34%, he said.

“While there has been a noticeable shift in public expectations around property prices I would have expected it to have been more pronounced given current media coverage.

“This would tend to suggest that Kiwis are generally more savvy about what drives property price inflation.

“They realise that the recent stalling of the market has more to do with Reserve Bank policies than any changes in the fundamentals of the market.”

The number of Aucklanders predicting price rises dropped considerably to 46% from 58% in the first poll, while the number picking price decreases was up to 14% from 9%.

In contrast, 62% of Wellingtonians expect property price rises and just 7% of them think there will be price decrease.

Age group breakdowns showed that young people are the most bullish about price increases (54%) while the over 60’s are the most likely to expect a price decrease (16%).

Meanwhile, the poll also showed that foreign buyers are still considered to have the biggest impact on property price growth.

Tradespeople and developers followed by local investors are the groups thought to have the second and third biggest impact on prices.

Central and local government are perceived to have the least impact on prices.

Read more:

Price growth expectations slump

Foreign buyers biggest market influence – poll

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