People still fearful of foreign buyers' impact on property
By Corazon Miller
6 Jul, 2017
[NZME] People continue to fear foreign investment as the biggest driver of property prices even as figures show they account for very little of the total sales.
The latest Property Institute Poll showed the public still ranked foreign buyers (7.3/10) as having the biggest influence on prices, ahead of developers (7/10) and local investors (6.3/10).
This fear was reflected when a Harcourts real estate agent was subjected to a huge public backlash after posting about successful sales to overseas buyers.
However, statistics show the reality that buyers from overseas make up a small proportion of actual sales.
The latest Land Information New Zealand (LINZ) data shows that in the first quarter of this year only 2 per cent of buyers were from overseas.
Comparatively 82 per cent were Kiwi citizens or residents and 16 per cent were corporate or business buyers.
Homes.co.nz chief marketing officer Jeremy O'Hanlon said it can be easy to feel frustrating with foreign buyers in a market where it was tough for many families to get into.
However, he said they were not solely responsible for pushing the prices up and in fact Kiwi investors played a larger role.
"While foreign buyers play a part in pushing up values, things like the supply of housing and our nation's generational infatuation with property investment are stronger drivers."
Despite the sentiment that overseas buyers would have the biggest impact on prices there was also a sense among those surveyed that prices were staying steady.
While many, 409 (43 per cent), still felt prices would still rise in the next half of the year, there were almost as many who felt they had plateaued, 379 (40 per cent).
Those living in the capital seemed to have the most pessimistic view of the market's stability, with more than half, 53 per cent, believing prices were likely to go up compared to 50 per cent of those in small towns.
Conversely almost half, 45 per cent, of Aucklanders felt prices would stay steady over the next six months and only 37 per cent thought they would rise.
Property Institute of New Zealand chief executive Ashley Church said the number of people expecting house prices to rise in the next six months was at its lowest point since its poll first started in November last year.
"Back in November 56 per cent of people polled were expecting house prices to keep rising - which means we've seen a 13 per cent drop in expectations in the past eight months".
Meanwhile, he said this poll showed the number of people expecting prices to decrease was up 5 per cent to 12 per cent.
"An indicator the vast majority still aren't buying into the idea of a market correction."
Church says that he expects the deterioration in house price inflation expectations to continue over the next few months - but did not expect it to continue forever.
"You can't artificially constrain house prices forever when you have a shortage of homes - but clearly you can do it for a while."
How people ranked factors impacting property prices
Foreign investors 7.3/10
Local investors 6.3/10
Reserve Bank 5.7/10
How people thought prices would fare over the next six months
Increase 43 per cent
Decrease 12 per cent
Stay the same 40 per cent
Unsure/refuse 4 per cent
About the poll
941 respondents agreed to participate out of 15,000 randomly selected. Based on this sample the maximum sampling error is +/- 3.2 per cant at the 95 per cent confidence level.
Poll was conducted by Curia Market Research in accordance with the New Zealand Political Polling Code, the Research Association New Zealand Code of Practice and the International chamber of Commerce/European Society for Opinion and Market Research Code on Market and Social Research.