House price growth expectations in Auckland have rebounded after a half-year slump that saw confidence drop to as low as negative 10 per cent.
Colliers International's latest quarterly Residential Property Market Outlook Survey found a net positive 9 per cent of respondents who expect median house prices in Auckland to rise over the next 12 months.
That reverses people’s view of the Auckland market earlier this year, when pessimists outnumbered optimists. In the three months to June 2019, Colliers found a net negative 6 percent of respondents, and in the March quarter there was a net negative of 10 percent.
Chris Dibble, Colliers International head of research and communications, says house price growth expectations have also risen nationally.
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“We now have a net positive 20 per cent of respondents expecting a higher median price over the next 12 months, up from a net positive 16 per cent in the previous June 2019 quarter survey. “
He attributes that to the positive economic environment right now, a combination of low interest rates, good employment rates and net migration that is still high, historically.
“These are the key drivers of confidence,” he says. “Also, in Auckland, we still have the underlying story of a shortage of supply.”
Colliers found that 12 of the 13 regions monitored recorded a net positive score. Christchurch is the exception, but optimism is rising there, especially for new terraced and detached housing.
The quarterly survey was undertaken after the Government’s decision to reset KiwiBuild. When asked if the reset would help more New Zealanders into home ownership, 52 per cent disagreed, 32 per cent agreed, 10 per cent indicated the status quo would remain, and the remaining 6 per cent were unsure. In the commercial property sector, respondents expect a solid year ahead.
But that confidence is not yet reflected in increases in stock of house inventory for sale.
“In my view, there’s been a recalibration in price expectations, so owners looking to list are still trying to understand where that balance is,” says Dibble. “If you look at the data, it’s a classic case of the highest number of buyers being first home buyers, while people not being forced to sell or move are not seeing significant price increases from 2016, so are sitting and enjoying their property.”
Dibble expects that right now people who think a significant capital gain is off the table for them now may be taking on board recent predictions by economists of price increases in the near future, and take that on board.
“Right now there’s no FOMO driving that appetite [to list] so people are saying ‘look, I’ll just wait for that to happen.’ “
“But that could be just around the corner.”
