by Paul McBeth
There's been a sharp rise in the number of people expecting higher interest rates in the next 12 months, but this isn't affecting housing confidence generally.
However, any rises in house prices over the next few years are likely to be small, as supply outstrips demand.
Those are some of the findings in ASB Bank's latest quarterly survey of housing intentions. The survey showed a strong level of stability in the three months to October, with a net 55 per cent of those surveyed thinking it was a good time to buy, down only slightly from 59 per cent the previous quarter.
"This is an encouraging result, coming at a time when general business and consumer confidence weakened, political uncertainty increased and mortgage interest rates edged higher," said the bank's economist Rozanna Wozniak.
She said the reason that higher mortgage rate expectations didn't appear to be affecting confidence could be because homeowners could take out fixed rate loans. "Borrowers can effectively insure themselves, at least over the medium term, against future rises in interest rates."
She said that consumers also seemed to have taken notice of comments from the Reserve Bank and private sector economists that rate increases should be less severe than in previous cycles.
"Looking ahead, the next few years should bring an improvement in real estate turnover but only modest increases in house prices," Wozniak said.
"With dwelling consents rising very strongly but population growth being reasonably modest, growth in the supply of houses is likely to exceed growth in demand."