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House buyer sentiment hits 5 year high

Growing numbers of New Zealanders think the times are improving for those wanting to buy a house, ASB’s latest Housing Confidence Survey shows.

Monday, November 12th 2018, 6:00AM 1 Comment

by The Landlord

The bank’s survey reveals the proportion of respondents who think it’s a good time to buy a house hit the highest level since April 2016 over the quarter to October 2018.

Although 51% of respondents says it is neither a good or bad time to buy, 16% now say it is a good time to buy as compared to 14% last quarter.

The proportion of respondents who feel it is a bad time to buy remains unchanged from last quarter at 19%.

ASB chief economist Nick Tuffley says survey respondents came within a whisker of the majority thinking it’s a good time to buy.

This is significant as pessimists have outweighed optimists in this survey for over five years, he says.

“The combination of slowing house price growth across much of the country, more homes to choose from and a favourable interest rate outlook are likely underpinning the increase in the number of respondents who think it’s a good time to buy a house.”

Tuffley expects respondents’ perceptions around whether it’s a good time to buy will remain contained by the fact that prices remain stretched relative to fundamentals in many centres.

However, the survey results suggest that the current state of the market is also impacting on house price expectations.

A net 26% of respondents expected house prices to increase – which is the lowest level since January. It is a marked drop from the 38% who expected prices to increase last quarter.

The trend was obvious across all regions of the country.

But respondents’ were least optimistic in Auckland (a net 15%) and Canterbury (a net 19%), reflecting a prolonged period of flat and/or falling house price growth in these two regions.

Tuffley says the widespread fall in house price expectations reflects the slowing in sales activity and house price growth that has been witnessed recently.

Recent legislation changes, such as the foreign buyers ban, may have weighed down respondents’ house price expectations.

“It follows that respondents are possibly factoring in a reduction in demand when they think about their house price expectations.”

This reinforces the ASB economists’ view that house price growth across much of New Zealand has peaked.

Meanwhile, the survey also shows that fewer respondents now expect higher interest rates in the year ahead.

A net 26% of respondents think interest rates will increase as compared to a net 33% of respondents in the last quarter.

Tuffley says bank mortgage interest rates have fallen across most fixed terms in recent months while questions remain around when the Reserve Bank (RBNZ) will raise the OCR.

“Both these developments are likely to be shaping respondents’ interest rate expectations. It’s not surprising to see respondents expecting that interest rates are likely to stay low, or shift even lower again, over the coming 12 months.”

Tags: ASB house prices housing market interest rates Mortgage Rates mortgages OCR RBNZ Reserve Bank

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Comments from our readers

On 13 November 2018 at 10:13 am Sooky1 said:
I'm not too sure if this article is accurate?? I've just read in the NZ Herald that Kiwi Build is embarrassing this Labour Govt, because they have continually made a song and dance about the hundreds of thousands who are wanting homes, and apparently those that have signed to buy a Kiwi Build home only total 338 and an embarrassed Government have had to leave the application process open indefinitely, it looks as though this Government could be left with a decent sized land bank???

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 3.95 4.49
ANZ Special - 3.55 3.45 3.99
ASB Bank 5.20 4.05 3.95 4.39
ASB Bank Special - 3.55 3.45 3.89
BNZ - Classic - 3.55 3.45 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.35 3.35 3.35
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank 5.80 ▼4.14 ▲4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - ▼3.39 ▲3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.55 3.39 3.89
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.55 3.45 3.99
Median 5.34 4.04 4.09 4.39

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