Poll confirms softening in price expectations

Media Release

14 March, 2017

Property Institute Poll confirms softening in price expectations

Property Institute of New Zealand Chief Executive Ashley Church says the Institute's second poll of public perceptions has revealed a softening in house price expectations.

He says the latest poll, which was conducted in February and which follows an earlier poll carried out in November, shows a change in public expectations in just three months.

"The number of people predicting a decline in property prices over the next six months has increased from 8% of those polled in November to 12% in the latest poll.

However, he notes that public sentiment still backs the expectation of house price increases - although this figure has dropped between the two polls.

"Back in November 56% of people thought property prices would keep rising in the next six months. In the latest poll that number has dropped to 50% - which is still high, but reflects a softening in expectations in line with other recent data".

He also notes that the number of people expecting prices to stay the same has gone up from 28% to 34%.

HEADLINE RESULT

* Age group breakdowns show that young people are most bullish about increases (54%), and the over 60's are the most likely to expect a decrease (16%).
* Geographic breakdowns were also covered. Of those polled, 46% of Aucklanders were predicting price increases in the next six months, down considerably on the 58% recorded, by the poll, in November. The number of Aucklanders picking a decrease has grown too, up from 9% in November to 14% in February.
* Wellingtonians are the most likely to be picking property price rises (62%), and the least likely to be picking a decrease (7%).
* From a political stand-point the poll says Green (63%) and New Zealand First (62%) voters are most likely to nominate property price increases in the next six months. New Zealand First supporters were also the most likely to nominate a decrease in prices (18%), while National supporters (44%) were most likely to pick prices to stay the same.

BIGGEST IMPACT

The poll also asked respondents to rate the impact, on house price inflation, of different groups. The scale ranged from 0 (no impact) to 10 (maximum impact). The five categories were:

1 - Foreign investors

2 - Local investors

3 - Tradespeople & developers

4 - Central & Local Government

5 - The Reserve Bank.

* Those polled selected Foreign Investors as having the largest impact (6.7) - although that's down from the November result (7.0).
* Tradespeople and developers were a new question and they came in second (6.1) while local investors were in third place (6.0).
* Central and Local Government are perceived to have the least impact on property prices (5.6), although that's up a bit on November (5.3).
* Young people were the most likely to blame foreign investors (7.2) as were New Zealand First voters (7.7).

"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 house price inflation and 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".

"It will be interesting to see if the trend continues in our next poll in April".

NOTE: The poll was conducted by Curia Market Research in February and has a 3.2% margin of error. The polling results are attached - 5 pages.

Ends

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