Kiwis predict huge increase in house prices

by NZ Adviser07 Nov 2016

Kiwis expect house prices to increase by a whopping 21 per cent during the next year, despite the national median house price increasing 12.7 per cent between October 2015 and October 2016, according to QV.co.nz.

And according to BNZ's new Financial Futures Research, non-property owners have even higher expectations, forecasting house prices will increase 25 per cent during the next 12 months.

“When it comes to rising house prices, people are very optimistic if they are banking on continuous price hikes well above average," said David Bullock, BNZ’s acting director of retail and marketing.

"It’s unlikely that housing will increase in value by as much as 21 per cent in the next year and nor would this be a good outcome for New Zealand. It’s also concerning if New Zealanders are planning their financial futures based on these sorts of predictions.

At the same time as expecting huge increases in their house values, New Zealanders also think that we’re paying too much for housing right now. This concept was pervasive throughout the country – even in regions like the West Coast and Wellington, more than half of people (57% and 59% respectively) think the market is overheated.

BNZ's figures also revealed only one in three (36%) think it’s a good time for people to buy their first house. Yet more than three quarters of people think it’s a good time for people to save for their first home.

The research found that nearly a quarter (23%) of non-property owners are planning to buy a house in another region and move there, and one in five (20%) non-property owners are planning to buy somewhere other than the region they live in and rent it out.

“Applied to Auckland, that would mean that 300,000 Aucklanders (a city almost the size of Christchurch) are actively considering moving out – this helps to explain some of the pricing pressure throughout provincial New Zealand,” says Mr Bullock.

“Only six months ago we were talking about the impact Auckland’s housing market was having on neighbouring regions such as Waikato and the Bay of Plenty and now we are seeing this flowing into other regions further afield.”

A further 12 per cent of New Zealanders are planning to cash up and sell their house to take advantage of the high prices.

COMMENTS

Most Read

NZ Adviser TV