Friday 3 July 2009
QV.co.nz Housing Survey - June 2009
Increased optimism for the property market
In the second quarterly survey of the New Zealand housing market carried out by QV.co.nz there are signs of improving optimism.
There were plenty of positive comments about the strength of the market in some areas. Good quality, well presented properties were noted to be holding their value well, amid a recent sharp increase in buyer activity. Property values and lower interest rates mean that nearly 6 out of 10 respondents still believe that now is a good time to buy.
Expectations of house price changes over the next year remain negative, although they have improved considerably over the quarter.
There was a strong sentiment expressed by some respondents that the current stability in the property market can’t be sustained, and that negative signs in the global and New Zealand economies must impact house prices. There was also a commonly expressed view that New Zealand house prices have become increasingly unaffordable and that a correction is necessary, and that the worst was yet to come. However the results of the survey show that the number of people holding this view is declining with only a quarter of the respondents expecting further significant declines in property values compared to nearly half the respondents holding this view in our March survey.
There has been a strong increase in the number of people considering buying within the next twelve months, but also a sharp decline in those considering selling. The timing of their activity within the next twelve months has also changed since the March survey, with more people now intending to hold off for at least the next six months. However a higher percentage of those intending to sell are looking to do so within the next three months. This may mean the market will remain more active during winter despite the overall decline in people intending to sell within the year.
Property values remain the most common reason to buy or sell within the next year. Interest rates also rank highly, although have less influence than last quarter due to recent rises in mortgage rates. Signs of increasing unemployment have pushed up job security as an influencing factor.
Looking to buy or sell investment property remains a key reason for people to get back into the market, and is at the same level as our March survey. The number of people looking to upgrade or downsize has also risen, but those looking to move to another area, buy their first home, or buy their first investment property have dropped.
Overall, the qv.co.nz housing survey suggests improving confidence, balanced with some caution:
- A net 38% of respondents believe that now is a good time to buy, up from 30% in March
- Respondents expecting house prices to decrease over the next twelve months has dropped considerably from a net 50% in our March survey to a net 21% in June
- Of the main factors influencing the decision to buy or sell, 51% of respondents listed property values, 32% listed interest rates, and 29% listed Job Security
- 46% of respondents are considering buying in the next 12 months, and 32% selling
- 31% of respondents listed investment property as the main reason for buying or selling
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