by Jenny Ruth
A net 47% of survey respondents believe it’s a good time to buy a house, down from 49% three months ago. Of those who believe it’s a good time to buy, 48% cited favourable house prices as a reason, down from 51% three months ago, while 43% cited favourable interest rates, up from 34% three months ago.
House prices have edged lower, according to Quotable Value whose provisional index fell 0.6% during the June quarter following a 0.5% rise in the March quarter. The Reserve Bank has cut its official cash rate, which influences wholesale and retail interest rates, three times this year from 6.5% to 5.75%.
ASB Bank’s survey had 1,200 respondents and only 99 of them think it’s a bad time to buy.
House price expectations have remained stable with a net 24% expecting prices to rise, largely unchanged from three months ago.
The bank says its calculations suggest people are expecting annual price increases of about 3% which it suggests could prove difficult to achieve. That’s partly because mortgage interest rates are likely to rise again soon.
Only a net 3% of those surveyed expect interest rates to rise in the coming year, down from a net 9% three months ago. The biggest proportion of respondents, 40%, are expecting no change in rates.
"The balance of risks suggest that although this is not a completely unrealistic expectation, yet again, it could be somewhat optimistic," the bank says.
It expects interest rates are likely to be relatively stable in the next four to six months, but the balance of risks suggest rates are more likely to rise in the following six months.
Having interest rates at current levels is stimulatory effect and so are unsustainably low, the bank says.
"Fixed mortgage rates have already
risen from their lows and at some stage during the next 12 months
we expect variable mortgage rates to have started an upward trend."
| « Mortgage borrowing rises $240m in July | Bank cheques can bounce, broker discovers » |
Special Offers
© Copyright 1997-2024 Tarawera Publishing Ltd. All Rights Reserved