Infometrics Prediction may be Very High

Infometrics have predicted that Hawkes Bay house prices are going to be under pressure - “Between June 2011 and June 2014, house prices in Hawke’s Bay are predicted to rise 20% (or 12% in real terms), the biggest forecast increase in the country.”

While not rejecting the assumptions behind this prediction, my expectation is that supply and demand are more likely than economic conditions to be the initial driver of prices. The first year of Infometrics prediction is an expectation of 9.3% growth - difficult to see that with listings growing so strongly.

The chart above shows that rental listings - ie vacant properties, are rising up to the highest ever, reaching 420 listings compared to 263 for the same time last year.

Jonette 2011