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Price expectations hit new low

Far fewer people believe house price growth is on the cards and yet more believe it is a good time to buy.

Tuesday, February 20th 2018, 8:00AM

by The Landlord

ASB chief economist Nick Tuffley

ASB’s latest Housing Confidence Survey is out and it shows that house price expectations have now slumped to a six and a half year low.

While 36% of survey respondents believe house prices will go up, 20% believe they will fall.

The decline in price expectations was most pronounced in Auckland - where just 8% believe house prices will increase - although they also eased around the rest of the North Island.

In contrast, price expectations in the South Island have lifted, led by Canterbury where 11% of respondents believe prices will rise.

The North/South divide is likely to reflect the fact that annual price growth rates have slowed in places like Auckland, Tauranga and Hamilton but remain higher in many South Island areas.

At the same time, the number of people who think now is a bad time to buy a house has reduced, particularly in Auckland where house buying sentiment is at its highest level since January 2013.

ASB chief economist Nick Tuffley says this change in attitude is most likely due to Auckland’s softening house prices.

“Price expectations have fallen to an eight-year low in Auckland as we continue to see the Reserve Bank’s speed limits taking effect.”

Tuffley says despite the lift in overall sentiment to buying property, upcoming housing policy changes may further ease house price expectations.

“There is a degree of uncertainty around the potential impact of policy changes so investors and home owners are likely to remain cautious and not rush into any major decisions.

“The market will continue to be constrained by population growth and low housing supply for some time.”

ASB’s survey also looked at interest rates and it reveals most respondents expect interest rates to rise over the next 12 months albeit with less conviction than in previous surveys.

Tuffley says muted inflation pressures have pushed out ASB’s forecast for rate hikes on the part of the Reserve Bank.

“We now expect the Reserve Bank to start lifting the OCR in August 2019, though in the meantime offshore interest rate increases could see mortgage rates start to creep up.”

 

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Lender Flt 1yr 2yr 3yr
ANZ 5.79 4.55 4.79 4.99
ANZ Special - 4.05 4.29 4.49
ASB Bank 5.80 4.44 4.69 4.89
ASB Bank Special - 3.95 4.29 4.49
BNZ - Mortgage One 6.50 - - -
BNZ - Rapid Repay 5.95 - - -
BNZ - Special - 4.10 4.29 4.49
BNZ - Std, FlyBuys 5.90 4.69 4.79 4.99
BNZ - TotalMoney 5.90 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.15 5.20 5.25 -
Lender Flt 1yr 2yr 3yr
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.70 4.85 -
Housing NZ Corp 5.80 4.69 4.79 4.79
HSBC Premier 5.89 3.99 4.19 4.69
HSBC Premier LVR > 80% - 3.79 - -
HSBC Special - - - -
Lender Flt 1yr 2yr 3yr
ICBC 5.80 4.59 4.69 5.09
Kiwibank 5.80 4.55 4.69 4.99
Kiwibank - Capped - - - -
Kiwibank - Offset 5.80 - - -
Kiwibank Special - 4.05 4.29 4.49
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 6.10 5.10 5.45 -
Resimac 5.30 4.86 4.94 5.30
RESIMAC Special - - - -
SBS Bank 5.89 4.85 5.05 4.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 4.19 3.95 4.49
Sovereign 5.90 4.45 4.69 4.89
Sovereign Special - 3.95 4.29 4.49
The Co-operative Bank - Owner Occ 5.75 4.10 4.35 4.49
The Co-operative Bank - Standard 5.75 4.60 4.85 4.99
TSB Bank 5.80 4.45 4.69 4.99
TSB Special - 3.95 4.19 4.49
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.95 4.69 4.79 5.19
Westpac - Offset 5.95 - - -
Westpac Special - 4.15 4.29 4.59
Median 5.89 4.50 4.69 4.79

Last updated: 2 December 2018 8:39pm

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