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House price expectations of households - A preliminary analysis of new survey data

Graham Howard, Özer Karagedikli

People's expectations of future house prices appear to be an important influence on house prices and the volume of house sales. The Reserve Bank has often referred to the importance of house price expectations but unlike many other variables we have had little detailed data on these expectations for analysis. The Reserve Bank has attempted to fill this gap by adding new questions on one-year-ahead house price expectations into the Reserve Bank's quarterly survey of households' inflation expectations. The questions were piloted in the March 2011 quarter survey. We now have results available from the June, September, December 2011 and March 2012 quarter surveys. In this note we introduce the new survey questions and discuss the initial results.