The ASB in their quarterly Housing Survey say that a net 51% of respondents expect house prices to rise, with their expectation of a rise of 4% in the year ahead.
This expectation would see a continuation of price rises which have been seen since the beginning of 2011, 18 months ago. At that time the Stratified mean price (as published by REINZ in association with the Reserve Bank) was $351,450, in July of this year it was up to $380,425 a rise of 8% over 18 months which equates to an annual rise of 6% which makes the ASB forecast an logical extrapolation of the current trend as seen in the chart below.
A increase of 4% would see the Stratified mean price rise to $395,650 which would see it a 4% increase from the peak of the market in November 2007 – certainly a 4% increase over 5 years does not keep in line with inflation, in fact it shows a 10% decline in real dollar terms.
The following charts track the latest Stratified mean sales price across the 3 main centers. The Auckland market has already seen Stratified sales prices break through the prior peak of the market back in July 2007 and are now some 4% ahead of that level. The same is seen in Christchurch were prices are up 3.5% on the October 2007 peak. Wellington though is going against the trend where the current Stratified mean sales price is down 4.2% from the peak of October 2009 which was only marginally above the peak of September 2007.