House prices expected to decline further

The current overall slowdown in the residential property market has everyone wondering how long it might last and how far property values might fall with predictions ranging from modest downward movements to decreases of 30% or more. We decided to ask our readers, the very people who are likely to influence the way the market moves, what they think will happen to property values and what their intentions are in the property market over the next 12 months.

QVs first property market sentiment survey, conducted last month, shows people are being realistic about what will happen to property values with the majority expecting houses prices to decline further in the year ahead. This is attracting bargain hunters to the market with 53% of respondents considering buying property in the next 12 months.

QV’s State of the Market survey shows:

  • Two thirds of respondents expect house prices to decline in the year ahead.
  • 54% of respondents believe now is a good time to buy
  • House prices, interest rates and job security were the key things that were likely to influence people to buy or sell in the next 12 months.
  • 53% of respondents are considering buying in the next 12 months, but the majority would wait at least 6 months before becoming active in the property market.

The survey shows people are expecting house values to decline further in the next 12 months with 46% picking decreases of more than 5%.  This is a worrying signal for property owners considering selling.  Only 17% of people expected house prices to rise, while 15% expecting them to remain the same.

There are some positive signals coming from the survey with 54% believing that “now is a good time to buy property”.  Only 24% disagreed with this statement.  This sentiment is backed up with 53% of respondents considering buying property in the year ahead, although the majority would wait at least 6 months. 
Peoples concern about their job secuirty has shown through strongly in our survey, with 31% listing it amoung their reasons for selling.  This was only topped by property values (55%) and interest rates (42%) as the main reason to buy or sell in the next 12 months.  Lesser concerns were lending conditions and financial pressures.

They survey also showed there may be a lack of supply of quality properties in the next 12 months with 23% more people looking to buy than sell.  This is being driven by 40% of respondents being attracted to the market by property once again becoming an attractive investment opportunity, with 10% looking to buy their first investment property.

What does this all mean?
It’s likely that we could continue to see further declines in property value over the year ahead, with QV’s latest property statistics already showing a 9.3% decline.  However there are signs that property values are starting to flatten out as reported in our latest statistics. Our survey also indicates that the recent increase in activity in the property market is a result of people seeing an opportunity to take advantage of lower interest rates and lower house prices, making it more attractive to buy property. While the year ahead doesn’t look very positive for property values it does look a lot more positive for increased sales activity, which will be welcome news to real estate agents and property professionals who have been struggling with the recent record low volume of sales.


With property values constantly changing you can keep up with the latest property statistics for your area by signing up to our free monthly email.  You can even get an instant estimate of market value for a property with E-Valuer to ensure you make an informed decision when you’re buying and selling.