9 August 2004
ASB Bank Housing
More balanced housing market gives breathing space for buyers
A slower housing market has prompted a small rebound in the number of people believing now is a good time to buy, but the overall tone remains cautious, according to the latest ASB Bank Housing Confidence survey for the three months to July 2004.
The proportion of people believing it is a good time to buy a house continues to be exceeded by the proportion who believe now is not a good time but the net percentage has lifted from -18% to -7%.
Meanwhile, expectations of house price increases continue to wane. The proportion of those surveyed who expect house prices to continue to rise in the next 12 months is a net 2%, below the net 12% experienced in the three months to April 2004 and the average net proportion of 50% in 2003.
ASB Bank Chief Economist Anthony Byett, believes the slowing of the market is creating opportunities for buyers, but these are tempered by other economic factors.
“The small improvement in perception about timing is a sign that people are under less pressure to buy quickly now - the market is more balanced. For first home buyers this is creating opportunities to enter the market in a more considered fashion. For existing home owners it is a double-edged sword: there are good buying opportunities but it may take longer to sell your existing home – think carefully before entering into unconditional purchase agreements.”
Lower pressure on buyers is evident in the number of days it now takes to sell a dwelling. REINZ figures show that the median number of days nationwide to sell a dwelling has pushed out from 24 days late in 2003 to 31 days in June 2004.
“People are being realistic in not expecting to see a repeat of the large price increases of the last two years. It is also appropriate that they expect higher interest rates.
“Invariably, though, there will be some disappointment amongst sellers, in particular amongst those who become forced sellers. It is a time for realistic expectations and good planning.
“It is encouraging to see economic growth still at good levels and unemployment so low. This is providing the wherewithal to weather rising interest costs. It is also encouraging to see the migration trend remaining in net inflow. This should provide extra demand to soak up some of the rising supply of housing coming on stream. The market may have come off the boil, so to speak, but it has not gone cold.”
People in the South Island continue to be the most wary about the housing market, the proportion of the opinion that it is a good time to buy being a net -16%, below the national average of a net -7%.
Ends - Results and graphs follow.
Note: the reporting of the housing confidence figures has reverted to quarters ending January, April, July, and October.
The net result is the difference between those who believe rates it’s a good time to buy and those who do not believe it’s a good time to buy.
The net result is the difference between those who believe prices will increase in the next 12 months and those who do not believe prices will increase in the next 12 months.