Confidence in the residential property market has bounced back to near pre-election levels, new research shows
Colliers International’s latest quarterly Residential Property Market Outlook Survey found overall sentiment in the residential property market has increased by 13 percentage points.
A net positive 28% of respondents expect median house prices to increase over the next 12 months, up from a net positive 15% three months ago.
Colliers International Research and Consulting National Director Alan McMahon says sentiment is now similar to that recorded in the third quarter last year.
The Q3 2017 survey, taken ahead of the September 23 election, found a net positive 31% of respondents expected median house prices to increase.
“What the latest survey shows is that sentiment has bounced back in all 12 of the centres surveyed following the election,” McMahon says.
“Expectations of house price rises remain strongest in Queenstown, Tauranga/Mount Maunganui and Wellington.
“There were also big increases in positivity in Napier/Hastings, Whangarei and Hamilton, which all recorded increases of more than 17%.”
McMahon says sentiment in the Christchurch residential market remains the lowest in the country. It is the only centre in negative territory, at net 2% negative.
In Auckland, meanwhile, price prospects across the different housing types are more positive than last quarter.
“There is an overall expectation that prices for both new and old apartments, terraced and detached houses will increase,” McMahon says.
“This sentiment is repeated in Wellington and Queenstown, but in Christchurch, confidence in existing housing is negative.”
McMahon says one of the key themes in comments from survey respondents was that increasing construction and labour costs will continue to drive up the price for new dwellings.
Meanwhile, confidence in the commercial property market has increased to its highest point since December 2016.
Colliers International’s latest quarterly Commercial Property Investor Confidence Survey found overall confidence has increased to a net positive 25%, up from 18% three months ago.
Overall, all regions recorded an increase in investor confidence, with 11 out of 12 regions recording a net positive score – meaning there are more optimistic respondents than pessimists.
McMahon says confidence in the office and industrial sectors is up across the broad. Retail confidence is up for Auckland and Christchurch, but down in Wellington.
The top two spots for investor confidence were taken out by Queenstown and Tauranga/Mount Maunganui again, for the seventh consecutive quarter.
Hamilton has overtaken Auckland and Wellington for the third spot, while Palmerston North has come out of negative territory, reporting a net positive 7%.
A key theme in comments from respondents was uncertainty around how e-commerce will impact brick and mortar retailers.
The residential survey drew on 6,249 responses while the commercial survey drew on 2,212 responses.