Corazon Miller is a NZ Herald reporter

Kiwis doubt house prices will drop

Half of Kiwis expect property prices to continue climbing. Photo: Doug Sherring
Half of Kiwis expect property prices to continue climbing. Photo: Doug Sherring

Most Kiwis are expecting property prices to continue their skyward climb with Wellington residents and millennials most likely to predict rising house prices - with many seeing foreign investment as the largest influence on the market.

The Property Institute of New Zealand commissioned a poll, taken in February, which found most continue to expect market prices to go up - albeit slightly fewer held this view compared to November last year.

The finding followed Real Estate Institute of New Zealand data out today that showed the median house price was up 10 per cent, $45,000, year-on-year.

Half of all surveyed in the Property Institute's February poll expressed an expectation prices would continue to go up in the next six months, with Wellingtonians and those aged 18 - 30 most likely to expect it to do so.

Of the 1006 people in the phone survey, 12 per cent thought the prices would drop, compared to 34 per cent who thought prices would go unchanged.

The poll also found the public ranked foreign investment as a strong influence in the market - on average 6.7/10, compared to 6.1/10 for tradespeople and developers and 6/10 for local investors.

Property Institute Chief executive Ashley Church said there had been a noticeable shift in public expectation since the last poll.

"Back in November 56 per cent of people thought property prices would keep rising in the next six months.

"In the latest poll that number has dropped to 50 per cent - which is still high but reflects a softening in expectations in line with other recent data."

More people were also beginning to expect a drop in prices, up to 12 per cent in February from 8 per cent last November.

When broken down by region, those living in Wellington were most likely to believe prices would rise; 62 per cent, compared to 54 per cent in the smaller towns, 50 per cent in the rural areas and 49 per cent in the regions.

In Auckland and Christchurch only 46 per cent thought the market would continue its upward climb.

The figures were reflective of the market itself - late last week Trade Me's latest Property Price Index showed the capital was "running red hot" having hit five record price marks in the past six months.

It said the average asking price jumped $100,000 in the past 18 months, compared to January 2008 - 2015 where prices only increased by $10,000.

In terms of age, 54 per cent of millennials expected prices to continue trending upwards, compared to 52 per cent of those aged 31 - 45 and 51 per cent of those in the 46 - 60 age bracket.

Curia Market Research, which conducted the poll, said the findings had a maximum sampling error of +/- 3.2 per cent.

- NZ Herald

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