The majority of New Zealanders (net 56%) believe that house prices will continue to increase over the coming 12 months.
“These results are indicative of the healthy state of the household sector at present, the fast pace of population growth, the active nature of the housing market and the relatively low level of interest rates by New Zealand’s standards,” ASB Bank chief economist Anthony Byett says.
“The survey continues to reveal that people’s sense of a bargain in the housing market has long gone, evidenced by the dichotomy between relatively strong expectations of higher prices and the relatively moderate numbers believing now is a good time to buy, especially in Auckland,” he says.
Auckland is completely out of step with the rest of the country with just 5% (net) who believe it’s a good time to buy a house.
“However, considering house sales in Auckland have been bubbling along over the last few months, the Auckland result shows a difference between what Aucklanders believe and what they’re actually doing,” Byett says.
“There are more people looking for somewhere to live – that’s the key driver in the housing market at present and builders are working frantically to catch up with this demand. This is not likely to change.
“What’s more, there is keen investor demand in housing also. Returns elsewhere have been low, house prices are rising and so too are incomes and rents “Add in lower fixed home loan rates and owner-occupiers and investors alike are in a relatively better position today than a year ago, on average, even after the house price increases.
“As always, there are risks: SARS (Severe Acute Respiratory Syndrome) could reduce the foreign student inflow; the government could lower its residency approval target; more Kiwi’s could opt for Australia.
“But none of these risks are mainstream forecasts. For now the housing market is busy, demand doesn’t look like it’ll decline and supply of houses is still tight. It remains a positive environment for housing,” Byett says.
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