Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Renewed Confidence In Housing From Rate Cuts

Renewed Confidence In Housing From Reserve Bank Rate Cuts

Renewed vigour in the Housing market follows a big turnaround in New Zealander’s interest rate expectations reveals the ASB BANK Quarterly Housing Confidence Survey released today.

Over the quarter a net* 5% of Kiwis surveyed throughout the country believe interest rates will increase. This result is down sharply (25%) from the first quarter of 2003. For the month of June a net 9% believed interest rates would decrease.

A net* 14% of those surveyed throughout the country believe it’s a good time to buy a house.

The majority of New Zealanders (63% of respondents and 54% on a net basis) believe that house prices will continue to increase over the coming twelve months.

“It’s no coincidence that the record turnover in housing in recent months has occurred at the time of falling interest rates,” says Anthony Byett, Chief Economist ASB BANK.

“The New Zealand housing market is still very active, prices are still rising and it appears that the up-phase in the housing cycle is far from over yet. Given, there has been a slight decrease in those who believe now is a good time to buy a house, this is offset by the change in heart over interest rates.

“Strong migration, rising incomes and low returns from other investments are other key factors behind the strong housing market in New Zealand, however lower interest rates are now the major impetus.

“Housing is as affordable now as in the previous four years, and more affordable than in the mid 90s. The annual interest payable on a 100% debt financed house bought today would be 9% less than a similar transaction a year ago. Add higher incomes now and the picture becomes even clearer,” says Mr Byett.

The ASB BANK survey reveals starkly contrasting views to predictions about the global housing market by The Economist Magazine which just predicted nominal house price falls of 20-30% in countries such as Australia, the UK and the Netherlands.

The same does not apply to New Zealand believes Mr Byett.

“Should the Economist have included New Zealand in its study, our house price to income ratio would have risen around 9% in recent years, as opposed to 20% and greater in other countries.

“There are always risks: new housing will eventually catch up with demand over the long term, investment returns could reduce on the basis of rent-to-price ratios, and global house prices could decline sharply. However, each of these scenarios would likely encourage the Reserve Bank to cut the cash rate even further than what is now forecasted. Furthermore, population growth will continue strongly despite the recent changes to migration policy.

“The future is always uncertain. But for now the housing market is busy, demand doesn’t look like it’ll decline and supply of houses is still tight. The best bargains may have passed but it remains a very positive environment for the housing market,” says Mr Byett.

The Results *

The net result is the difference between those who believe rates/prices will increase or it’s a good time to buy and those who do not believe rates/prices will decrease or it’s a bad time to buy.

© Scoop Media

Business Headlines | Sci-Tech Headlines


Onetai Station: Overseas Investment Office Puts Ceol & Muir On Notice

The Overseas Investment Office (OIO) has issued a formal warning to Ceol & Muir and its owners, Argentinian brothers Rafael and Federico Grozovsky, for failing to provide complete and accurate information when they applied to buy Onetai Station in 2013. More>>


Tomorrow, The UN: Feds President Takes Reins At World Farming Body

Federated Farmers president Dr William Rolleston has been appointed acting president of the World Farmers’ Organisation (WFO) at a meeting in Geneva overnight. More>>


I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>


Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>


Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>


Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news