Sentiment at net positive 15 per cent as foreign ownership changes loom
Confidence in residential property prices has slumped by 16 percentage points, the first quarterly survey since the election shows.
Colliers International’s latest Residential Property Market Outlook Survey, released today, shows uncertainty around the new government’s policies is one factor behind the dip in sentiment.
Research and Consulting National Director Alan McMahon says the percentage of respondents who think the median house price will increase in the next 12 months has fallen to a net positive 15 per cent, down from 31 per cent three months ago.
Confidence around prices increasing was down in all 12 centres surveyed, by more than 20 per cent in half of them.
McMahon says the survey shows expectations of house price increases are strongest in Queenstown, Tauranga/Mt Maunganui and Wellington.
In Auckland, meanwhile, confidence has fallen to a net positive 6 per cent – the lowest score since Colliers International’s quarterly survey began in 2016.
McMahon says differences in opinion about Auckland’s various housing typologies are much more marked than in previous surveys.
“There is an overall expectation that prices of existing apartments will fall, in contrast to prices for new apartments, terraced and detached houses, where there is a clear expectation of price increases,” he says.
McMahon says the main concern in comments made by respondents is uncertainty around the details and impact of the new government’s policies.
“We anticipate these concerns will continue to have an impact until there is greater clarity around the extent and scope of foreign ownership restrictions in proposed changes the Overseas Investment Act, as well as changes to rules around taxation treatment of rental income and rental housing quality standards.”
Confidence in the commercial property sector has also taken a dip, albeit at a much more modest rate.
Colliers International’s latest quarterly Commercial Property Market Investor Confidence Survey found sentiment remains positive nationally, although confidence has dropped to 18 per cent, down from 20 per cent three months ago.
Auckland and Christchurch have taken a hit across the retail, office and industrial sectors, while Wellington is up in all three.
Queenstown, Tauranga/Mt Maunganui and Auckland have taken the top three spots for overall positive sentiment yet again, for the sixth consecutive quarter, but confidence is down in all three.
The commercial survey drew on 2,649 responses while the residential survey drew on 8,972 responses.
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