Little change in consumer sentiment over property market
The results of the latest survey of the New Zealand housing market carried out by QV.co.nz shows little change from the last survey in December 2010.
Most respondents still believe that property prices will increase slightly over the next year.
Property values remain the main factor determining whether people intend to buy or sell property. There has been a slight increase in the number of people considering interest rates in their decision, most likely as a result of continued low mortgage interest rates. There has also been a slight decrease in job security and financial pressures cites as reasons, perhaps reflecting a slight improvement in people’s perception of the strength of the overall economy.
More people now consider it to be a good time to buy, but most believe that it is not a good time to sell. Compared to the last survey there are now fewer people considering selling in the next twelve months, and of those who do intend to sell, most are prepared to wait six to twelve months. Similarly there are fewer people considering buying, and most of these are prepared to wait at least six months. This suggests that sales activity may remain subdued over the winter months.
Only 30% of the property investors intended to buy or sell in the next year, and most of them were also prepared to wait six to twelve months.
There has been a slight increase in the number of property investors intending to increase rent within the next six months.
Prices expected to increase slightly during the next year
A net 13% of respondents expect house prices to rise over the next twelve months. This is a very marginal increase on the net 12% in our last survey in December 2010. In contrast, a year ago a net 10% expected prices to fall and kin March 2010 a net 39% expected prices to fall. So sentiment appears to have stabilised over the past six months.
The breakdown of the latest survey is:
- 43% expect house prices to rise, same as in December
- 30% expect prices to fall, down slightly from 31% in December
- 25% expect values to remain the same, up slightly from 23% in December
Property values still the most common reason to buy or sell
There has been little change in the factors that are influencing whether people are going to buy or sell. Property values remain the main reason for people deciding whether to buy or sell. There have been very slight declines in job security, financial pressures and lending conditions as reasons to buy or sell, but a slight increase in interest rates, most likely as a result of continued low mortgage interest rates.
The overall breakdown is:
- Property values: 49% listed this as a factor, similar to the 51% in December
- Interest rates: 32% (29% in December)
- Job security: 23% (25% in December)
- Financial pressures 23% (unchanged)
- Lending conditions: 17% (from 16%)
More now believe now is a good time to buy
There has continued to be an increase in the number of people believing that now is a good time to buy. A net 52% believe now is a good time to buy, up slightly from 48% in December, and well above the 31% in June last year.
The breakdown is:
- 66% agreed or strongly agreed that now is a good time to buy (61% in December)
- Those who agreed increased to 37% from 31% in December
- 20% were neutral, down from 27% in December
- 14% disagreed or strongly disagreed (13% in December)
Not considered a good time to sell
A net 42% of respondents believe that now is not a good time to sell, which is a slight improvement on the 46% in the December surbey.
The breakdown is:
- 58% disagreed or strongly disagreed that now is a good time to sell. This is similar to the 59% in December but there was a shift from strongly disagreed to disagreed
- 16% agreed or strongly agreed (up from 13% in December)
- 26% were neutral, similar to the 27% in December
Fewer intending to sell their own home
Compared to the last survey when 49% indicated they may sell their own home in the next twelve months, this survey saw that drop to 44%. Of those intending to sell this year, there are now fewer intending to do so within 3 months and more waiting at least six months. This may be a reluctance to sell during the winter months, or sellers waiting to see what the market does in the coming months before committing.
The breakdown of those intending to sell is:
- 27% intend to sell within 3 months (down from 47% in December)
- 21% intend to sell in 3 to 6 months, similar to the 18% in the June survey
- 52% intend to sell in 6 to 12 months, up from 34% in the December survey
Little change in timing to buy
There has also been little change in the number of people intending to buy this year. 47% of respondents in the latest survey were considering buying in the next year, down slightly from the 50% in the December survey. However, there has been little change in timing of when they intend to buy, suggesting that many are prepared to wait. This suggests that sales activity may be subdued over winter.
The breakdown for those intending to buy or build their own home is:
- 26% intend to buy or build within 3 months (28% in December)
- 25% intend to buy or build in 3 to 6 months (22% in December)
- 49% intend to buy or build in 6 to 12 months, similar to the 50% in December
Still few property investors intending to sell
Of those respondents who indicated they were property investors, only 30% intend to sell an investment property in the next 12 months, similar to the 33% in December. Far fewer intend to sell within 3 months than was the case in June.
Of those intending to sell investment properties the breakdown is:
- 20% intend to sell within 3 months, down from 46%
- 20% intend to sell in 3 to 6 months (23% in December)
- 60% intend wait at least 6 months, double the 30% in December
Fewer property investors intending to buy
Only 30% of property investors intend to buy within the next year, down from the 38% in the December survey. Of those who do intend to buy it is more likely to be in at least six months.
The breakdown for those investors intending to buy is:
- 20% within 3 months (unchanged from the December survey)
- 28% in 3 to 6 months (18% in December)
- 52% in 6 to 12 months (62% in December)
Rents look set to creep up
There has been a slight increase in the number of property investors intending to increase rent over the next six months.
The breakdown is:
- 42% intend to leave rent the same, down from 46% in December
- 42% intend on increasing rent by 1-5%, up from 37% in December
- 11% intend to increase rent 6 to 10%, up from 6%