The majority of Kiwis expect house prices to rise over the next 12 months, but the foreign buyer ban appears to have dented confidence in the market, according to the results of a new survey.
Colliers Internationals' quarterly house price outlook survey found that expectations of growth in the residential property market were high, but had dipped slightly after a rebound the previous quarter.
Kiwis were most confident about prices rising in Queenstown, but felt least positive about Christchurch's property market.
Survey respondents also indicated there is room for growth in Auckland although were more bullish about new-build houses and apartments in the city than existing houses.
In Northland it seems there are some positive signs as Whangārei was one of only two locations to record an increase in the net percentage of respondents expecting the median price to increase over the next 12 months. The other was Dunedin.
OneRoof Editor Owen Vaughan said: "The strong performance of regional centres in the survey results shows that New Zealanders believe there is scope for further price growth outside the main metro centres.
"The commitment to improve infrastructure in Northland has paid off, with Kiwis feeling increasingly confident about the long-term future of Whangarei's housing market, while increased tourism activity in Rotorua and Napier will have contributed to positivity in those markets."
Director of Ray White Whangarei Vanessa McKenzie said investor activity in the city was robust, with Whangarei offering better returns than many other markets.
"There has been an increase in people moving into the region and that has given the market buoyancy and boosted the local economy," she said.
"There is also significant movement within the market, with existing home-owners capitalising on the lift in prices to either upsize or move nearer to lifestyle or coastal properties in the region."
She added: "The coastal market is attracting a lot of interest. With confidence in the Whangarei market high, locals are increasingly looking to invest in a holiday home."
More than $17 million from the Regional Growth Fund is to be invested in Northland and the government is considering plans to upgrade rail infrastructure to link Northport to Auckland.
Road infrastructure works already underway, including the Puhoi to Wellsford motorway extension, will encourage further growth in the region, putting it within easier reach of Aucklanders.
Last week Northland Regional Council announced that it was funding five new sports projects in the region, including the development of large and modern multisport facilities in Dargaville, Kaitaia and Whangarei and significant upgrading of parks in Kaikohe, and Mangawhai.
Colliers head of research Chris Dibble said the lower level of positivity recorded this quarter seems to be driven by the foreign buyer ban.
The ban, which comes into force on October 22, will prevent foreigners from purchasing Kiwi homes, although the law includes allowances for Australians and Singaporeans to buy local homes and for foreigners to buy 60 per cent of the units on offer in major apartment complexes of 20 units or more.
"The lower level of positivity this quarter seems to surround changes to the Overseas Investment Amendment Bill.
According to the Colliers survey, there is still an expectation that median prices will increase in Auckland, however, confidence in the city has waned over the winter period.
The survey showed a net positive 16 per cent for this quarter, down from a net positive 28 per cent the previous quarter.
The residential survey drew on 6634 responses.