Despite signs of a cooling housing market, most New Zealanders expect house prices to continue rising in the next 12 months.
57% of Kiwis surveyed in our State of the Investor Nation report remain confident in the domestic property market - despite an increasing groundswell suggesting that the New Zealand housing market is beginning to plateau.
Strictly speaking the Auckland area has seen the average house value decline -1.5% if you compare QV’s house value data between March 2018 and 2019, but this decline has been fuelled by some areas across Auckland declining by up to 4.1% during the same period. At the same time, outside of Auckland, there are few signs of a cooling property market so it’s no surprise a large swathe of Kiwis remain confident in house prices.
Our State of the Investor Nation report also found:
- 91% believe house prices will continue to rise in Wellington
- 83% believe house prices will continue to rise in regional New Zealand
- 77% believe house prices will continue to rise in Christchurch/Canterbury
- 72% believe house prices will continue to rise in Auckland
Younger New Zealanders (45%), lower income earners (48%) and renters (54%) are more likely to think that it is not a good time for people to buy their first house.
It’s unsurprising to find that Wellingtonians are most confident that house prices will continue to grow in their region, as QV data indicates the Wellington area has seen the average house value grow 53.7% between March 2015 and 2019.
Confidence in Christchurch and the Canterbury and regions doesn’t seem out of place either as there has also been an upward trend in the average house value in these areas, albeit a little slower in Christchurch, while low interest rates and increased competition between lenders to offer the lowest interest rates have become hallmarks of the market.
Given the steady rise in property prices it’s easy to see why Kiwis’ love affair with investing in property has continued to flourish, and property continues to remain the prime investment focus and wealth indicator for many New Zealanders.
Is the ‘quarter acre’ Kiwi dream over?
Although some Kiwis will have benefited from investing in property in recent years, the survey showed people aged 18-34 (45%), those earning less than $70,000 a year (48%) and those renting (54%) were more likely to think it was not a good time to buy their first home.
People in these groups are more likely to live pay check to pay check, with very little – if anything – left over to save. Add the fact that average asking prices are at all-time highs, it appears people may be starting to give up on the much sought after quarter acre dream.
Despite that, history tells us markets can and do correct, so the cooling of activity in places like Auckland will be seen as a positive by those waiting for the right time to get on the property ladder.
How might this affect you? See how you compare against the data from The State of the Investor Nation report by telling us some basic information about yourself.
You can read more about The State of the Investor Nation report and download a full copy here.