Poll: Public aren’t buying talk of property crash

Media Release

07 December 2016

0500 EMBARGO

Property Institute Poll: Public aren’t buying talk of property crash

A Property Institute poll of public perceptions has revealed that foreign investors are copping the blame for having the biggest impact on New Zealand house prices - while a clear majority of people don’t believe those talking up a property market crash.

PINZ Chief Executive Ashley Church says the institute commissioned the polling questions to get a better feel for public perceptions about property.

“I’m surprised by some of the results - particularly the unexpectedly broad view that foreign investors are having ‘the biggest impact’ on the property market – but as a snapshot of perceptions these views are important and shouldn’t be ignored.”

“The views expressed in the survey aren’t necessarily right – but they’re an important barometer of market sentiment and a guide to buyer behavior”.

HEADLINE RESULT

Mr Church said that participants were asked whether they thought property prices would increase, decrease or stay the same in the next six months.

“56% of respondents indicated that they believe house prices will increase; only 8% are picking a decrease and 28% opted for ‘stay the same’. In other words, a clear majority of people are picking house price inflation to continue for at least another 6 months”.

He said that age group breakdowns also provided some interesting observations, with two thirds of those aged 31-45 (the largest group) being the most certain of property price increases in the next six months, while the age bracket most likely to pick a decrease were those aged over 61 years old (12%).

Geographic breakdowns were also covered. Of those polled, 58% of Aucklanders, 62% of Wellingtonians, 46% of Christchurch locals are expecting property prices to increase in the next six months. In provincial cities the numbers were 57%, in towns 53%, and in rural areas 54%.

Those most likely to pick a decrease were in towns (10%), followed by Auckland (9%) and provincial cities (8%) and rural areas (8%)

Meanwhile in Christchurch 40% of locals are picking prices to stay the same.

Mr Church says that party affiliation also seemed to play a part in the extent to which participants were expecting an increase in prices.

Labour supporters (66%) and New Zealand First supporters (64%) voters are most likely to expect property price increases in the next six months - while National supporters (12%) were most likely to pick a decrease in prices”.

BIGGEST IMPACT

Mr Church said that the survey also measured the perceived impact, on house prices, of 5 price influencers. These were foreign investors, local investors, immigrants, Central & Local Government and banks. Participants were asked to rank these on a scale of 0 to 10 with 0 being no impact & 10 being the highest impact.

“Participants selected Foreign Investors as having the largest impact with an impact rating of 7, followed by Banks (6.2) and Domestic Investors (6). Central and Local Government were perceived to have the least impact on property prices at (5.3) and immigrants were second to lowest (5.6)”.

He said that geographically, by gender, political persuasion and age group - ‘foreign investors’ were nominated across the board as having the ‘biggest impact’ on property prices – with the exception to this being among Green Party supporters who believe the banks have the same impact on property prices as foreign investors.

“While people seem to differ on the causes, a significant proportion of them aren’t buying recent talk of an imminent crash and the large majority of people also share our view that a sharp price correction in the housing market is unlikely”.

“That would tend to confirm our view that the current price slow-down in the Auckland property market is being driven by the Reserve Banks LVR restrictions, rather than any loss of confidence in the Auckland market”.

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

Property_Institute__Poll_Results_November_2016.pdf

Ends

© Scoop Media