Confidence in the housing market has fallen, with fewer Kiwis expecting property prices to rise and more anticipating further declines.
A new Trade Me Property survey of around 2,000 people, conducted in May, found a significant shift in sentiment over a short period.
Just 29% of respondents said they expected house prices to increase over the next 12 months, down from 46% in March. Meanwhile, the share of people expecting prices to fall more than doubled, from 7% to 16%.
The results suggest buyers and homeowners are becoming more cautious about the outlook for the property market.
Cost of living takes centre stage
The survey also revealed a change in what is worrying prospective buyers.
In March, the biggest concern was finding a suitable property. By May, the cost of living had become the top issue.
That shift highlights the broader economic pressures many households continue to face. Even though inflation has eased significantly from its peak, many New Zealanders are still dealing with higher prices for essentials such as food, insurance, rates and utilities.
At the same time, uncertainty around interest rates, global events and economic growth may be affecting confidence.
Sentiment and the property market
Buyer confidence is an important indicator because it can influence market activity.
When confidence is high, buyers are often more willing to make offers and commit to purchases. When confidence weakens, some people choose to delay major decisions while they wait for greater certainty.
However, sentiment and market performance do not always move in lockstep. Property markets can continue functioning normally even when confidence is subdued, particularly when population growth, housing supply and lending conditions are supporting activity.
For buyers, periods of lower confidence can sometimes create opportunities. Reduced competition may provide more time to research properties, negotiate prices and complete due diligence.
Looking beyond the headlines
While survey results provide a useful snapshot of public opinion, property decisions are ultimately personal and should be based on individual circumstances rather than market sentiment alone.
Factors such as income, job security, deposit size and long-term plans often have a greater influence on whether purchasing a property makes sense than short-term shifts in confidence.
Market sentiment can change quickly, but a well-prepared buyer is always in a stronger position. Contact us if you’d like to assess your borrowing capacity, review your options and prepare for your next property purchase.
