by The Landlord
A net 48% of respondents expect prices to continue to rise over the next 12 months.
A reading of 0% would indicate that respondents were evenly split in their views on the direction for house prices.
Nationally, a net 8% of respondents said now was a bad time to buy a house, down from a net 11% in the last survey.
ASB chief economist Nick Tuffley said: “Even while firm expectations of house price gains remain, we’ve seen a slight drop in the number of respondents who see now as a bad time to buy a house.”
Some of the factors that had been putting people off might change before long, he said.
“Rising mortgage rates, expensive housing and lending restrictions have all been contributing to a mood of pessimism is recent surveys. Some of these pressures may start to ease soon, which may start driving more positive sentiment about buying a house. For example, the RBNZ has moved to the sidelines for a while so potential buyers are likely to be less worried about imminent interest rate increases.”
House price gain expectations remained strongest in Auckland and Christchurch, which Tuffley said was consistent with the variance in actual market conditions.
“As usual, house price expectations remain highest in Auckland with net 56% of respondents, followed by Christchurch with net 51% of respondents. In contrast the national average is net 48% expecting price gains over the next year. Housing supply shortages and population growth are not expected to ease much over the coming year in the two main centres so it’s likely price expectations and actual house prices will continue to remain high there,” he said.
“Outside of these two centres, the housing markets have not been as tight so price gains have typically been more modest as have expectations of house price rises. In all regions, we expect that price expectations and actual price growth are past their peak.”
Fewer people were expecting higher interest rates and more expected them to stay the same or decrease, Tuffley said. A net 55% expected interest rates to rise in the next year.
“This change in attitude is likely a combination of the RBNZ’s signal that it may pause OCR rises and the influence of recent cuts to select fixed-term interest rates.”
“We expect the RBNZ to hold the OCR at 3.5% until September,” Tuffley said. “This should lead to a stabilising in shorter-term fixed interest rates while longer-term fixed interest rates are still likely to be influenced by global conditions.”
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