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A good time to buy?

There’s slowing price growth and subdued sales nationwide – and yet a new survey shows the number of people who think it’s a good time to buy a house is at a five and a half year high.

Friday, February 15th 2019, 9:55AM 2 Comments

by The Landlord

According to the latest ASB Housing Confidence Survey, the optimists outweigh the pessimists when it comes to sentiment around whether it’s a good time to buy a house.

But it’s a close call: 17% of respondents thought it was a good time to buy, while 16% thought it was a bad time.

A further 51% said it was neither good nor bad, and 15% didn’t know.

ASB chief economist Nick Tuffley says there was a clear trend towards greater buyer optimism, with Cantabrians being the most optimistic.

“In Auckland, there were an equal number of pessimists and optimists – a six-year high in sentiment. Auckland is one area of the country where inventory has been growing recently, which may be cheering buyers.”

At the same time, house price expectations slipped again in the three months to January, with 23% of respondents anticipating price increases as compared to 26% in the previous quarter.

Despite the dip, respondents’ house price expectations are still higher than at this time last year, in the aftermath of the 2017 election, when they hit 16%.

But they are at a lower point than the long-term average of 28%.

Expectations are lowest in Auckland, where just a net 8% expect house prices to rise – the joint-lowest figure seen in the region in nine and a half years.

Tuffley says house price growth expectations shifted unevenly during the quarter, falling significantly in Auckland and dipping slightly in the rest of the North Island, but ticking up by a whisker in the South Island.

“As in the previous quarter, price growth expectations are softest in Auckland and Christchurch, reflecting falling and flat price growth in the two centres, respectively. Expectations in the City of Sails are especially low.”

The foreign buyers ban legislation, which came into effect on October 22, may have dampened demand in the housing market and respondents were likely factoring this into their house price expectations, he adds.

Meanwhile, interest rate expectations continue to decline across the country and they are now at two-year lows.

The net balance of respondents anticipating higher interest rates decreased significantly, from 26% in the October quarter to 14% this quarter, despite a plurality continuing to expect rates to rise.

Tuffley says the past two quarters of lower interest rate expectations reflect the dip in fixed mortgage rates seen late last year and a growing perception that higher interest rates are increasingly distant.

“Looking ahead, interest rates are expected to remain reasonably low by historical standards, supporting the housing market and bolstering continued optimism amongst prospective buyers.

“But we expect mortgage rates will still gradually tick upward given proposed increases in bank capital requirements have the potential to increase the cost of funds.”

Tags: ASB house prices housing market interest rates property investment property values

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Comments from our readers

On 15 February 2019 at 12:15 pm 1133 said:
Auckland prices go down , when are places like Rotorua , Taupo etc. going to keep pace in the down spiral ? Seems they are immune from drops in value. Owners in these areas need to start looking at where their prices on their propertys have come from. I have appartments in Sydney. One has dropped $ 150,000 in 3 months.( from $ 550,000 to under $ 400,000 today) 2 in the block are for sale, equity is not there anymore. Bank has called for more money or re-mortgage.Owners are devastated, and have no home anymore, they will be renting before the end of the month. Their propertys have to be sold , at possibly no reserve. Beware NZ , it might happen here.
On 17 February 2019 at 10:34 pm Peter L said:
The regions follow Auckland, tailing by around two years.
So when AKL goes up the regions follow two years later as the ripples spread out.
The price reductions should reach the regions in 2021.

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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

Last updated: 15 November 2019 4:16pm

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