People in Auckland and Christchurch are more bullish than other Kiwis in expecting house prices to rise, new polling by the Reserve Bank of New Zealand shows.
The central bank's house price expectations survey, which has been running since the June 2011 quarter, shows a growing amount of New Zealanders are expecting house prices to rise over the coming year, although many expect that the rise to be eaten into by general inflation. Correspondingly, fewer were expecting house price falls over the coming year, compared with a year ago.
The latest survey results for the current March quarter, released yesterday, showed a net 53.1% of respondents throughout the country believed house prices would rise over the coming year. That was up from 40.9% in the December 2011 quarter, and 34.1% in the June 2011 quarter. The Reserve Bank noted that with only four quarters of data available, it was not possible to know whether the changes in expectations were seasonal.
The weighted mean expectation for house price movements of the 620 respondents to the latest survey is for a rise of 3.1%, which is up from 2.2% in the initial June 2011 quarter survey. The median expectation if for a 2% rise, compared with medians of 0% in each of the first three surveys. The Reserve Bank said in a research paper accompanying the latest survey that 33% of respondents expected no change in prices over the year ahead.
Figures on inflation expectations, released by the Reserve Bank at the same time yesterday, show general expectations for 2.2% CPI inflation over the year ahead.
A net 65% of Aucklanders expected house price rises over the coming year, up from 46% in the June 2011 quarter. Christchurch residents were similar, with a net 66% expecting increases, up from 42% last June.
"Auckland’s households have been consistently more likely to expect house prices to rise than those in other regions, but perhaps the most interesting feature of this table in the big increase since June in the number of Wellington respondents expecting house prices to rise (net 50 percent in March 2012, compared with a net 14 per cent in June 2011)," the Reserve Bank said in the research paper.
"These results seem consistent with the latest official quarterly data from Property IQ for the year to September 2011, which shows actual house price inflation in Wellington lagging behind Auckland and Christchurch (-0.7 percent compared to 4.0 percent and 4.2 percent respectively). The mean expectation of Auckland and Christchurch respondents is around 4 percent, while the mean expectation of Wellington respondents is around 2 percent," the Reserve Bank said.
Responses
Here are the responses to the question, In one year’s time do you think house prices overall will have increased, decreased or stayed the same compared to now?
If a respondent expected an increase or decrease, they were asked, By what percentage do you think they will have increased/decreased?
And here is the regional breakdown
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