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

People's expectations of future house prices appear to be an important influence on house prices and the volume of house sales (Wheaton 1990; Berkovec and Goodman 1996). For example, Case and Shiller (2006) argue that expectations played a role in producing California's house price boom in the late 1980s. If house price expectations matter, then how people form those expectations, and how expectations respond to different shocks (for example, an unexpected increase in population) also matters. 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.