The public's confidence is under fire, with the property market's usual spring pick-up just not happening.
That's the view of the Real Estate Institute of New Zealand, which believes that outside pressures have created a "wait and see" approach among potential home owners. In the Institute's latest monthly commentary, president Max Oliver said the recovery from the economic recession of late last year had been spectacular but this had now begun to level out.
While agents reported increased public interest and an upturn in enquiries, September didn't deliver the surge in activity that's typical for spring. However, Oliver said the most recent property figures still showed the market's continued improvement on 1998.
"The impending election and concern regarding mortgage interest rates have slowed the market down as New Zealanders return to their former state of watchful caution."
"While there has been no rise to date of the Official Cash Rate, the announcement from the Reserve Bank signalling its intentions has had sufficient impact, contributing to the growing uncertainty amongst New Zealanders."
In a briefing to media, Oliver said that a continued adverse outlook for the economy would dampen future demand in the property sector. Political uncertainty and possible policy changes could also destabilise confidence and property values.
"At present, economists are predicting interest rate increases, poor export returns, a lower New Zealand dollar and a depressed labour market. If this continues, the implication for residential property is lower demand, particularly in provincial new Zealand where the economy relies on commodity products."
