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


ASB Housing Confidence Survey

ASB Housing Confidence Survey

Statement made by Anthony Byett, Chief Economist ASB

- Expectation of house increases slightly down

- On balance people don’t think it is a good time to buy

- Market data points to “soft landing” for housing market

There is a familiar look to the latest ASB Housing Confidence survey for the three months to July. The survey results and recent market reports are generally consistent with a return to the housing conditions that existed in 2004 before the March quarter 2005 spike in housing demand: housing activity is lower but the market is still busy; house prices, on average, are still rising albeit at a slower rate; and people on balance are expectant of further price increases but remain cautious.

A net 20% of those surveyed in the ASB Housing Confidence survey believe house prices will rise in the next 12 months, down from a net 28% last quarter, and only slightly above the average net response since January 2004. The pessimism of South Islanders continues in the latest survey. A net -5% expect house prices to increase, compared with a net 10% in Auckland and a net 40% in the rest of the North Island.

People still generally expected interest rates to increase although the proportion expecting higher interest rates dropped from a net 62% to a net 46%.

On balance people do not consider now a good time to buy a house. There was a small drop from a net -1% to -3% but this level is similar to the -5% average of the last two years.

The mix of responses we received to our survey is similar to those received last year. Likewise the outlook is very similar, namely house prices and debt burdens are high and suggestive of a slower phase in the housing market. This has happened in places such as Nelson, Queenstown and Auckland, centres generally to the fore of the housing upturn, and is still likely to occur amongst the wider economy. That said, this outlook proved premature last year and there is the risk that economists underestimate the momentum in the market at present.

The survey results do not indicate pessimism amongst the public but rather a continuation of the recognition that the bias remains in favour of the seller. The degree of confidence in housing amongst the investment community was evident in the July 2005 ASB Investor Confidence report, showing residential rental property investment still ranked number one for expected returns.

These survey results are consistent with other data in the market pointing to continued house price increases. The most recent QVNZ provisional figures and REINZ median sale prices suggest that the national average house price increased in the June quarter at a pace similar to the 2.9% quarterly average appreciation of 2004.

It appears that the demand spike has come and gone and the steadier market conditions of 2004 have been resumed. What happens next is always the tricky question. The momentum and opinions shown at present are suggestive of a ‘soft landing’. Likewise the moderate level of interest rates, the low levels of unemployment, the ongoing household income growth and signs that immigration has stabilised also point towards to any slowdown being moderate for the housing market in general.

Keeping with the return to 2004 conditions, the last word remains the same: it is the forced sellers that will experience difficulty in the next year or two. A wider look at one’s personal and business situation remains a prudent step while more cautiousness when selling and buying is recommended.


The Results:

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.

The net result is the difference between those who believe interest rates will increase in the next 12 months and those who do not believe interest rates will increase in the next 12 months.

© Scoop Media

Business Headlines | Sci-Tech Headlines


Gita Hits NZ: 'It Was Literally Like A Wall Of Water'

"We were looking at the river at 80 cubic metres at about 4pm thinking it was amazing that we'd dodged the bullet ... an hour and a half later it was 600 cubic metres, and it just kept going up to 900 from there." More>>


America's Cup: Another Day, Another Cup Village Plan

A fourth option modelling what an America's Cup Village in Auckland might look like has arrived today as a planning deadline nears with no agreement in sight.More>>

Closing Or Selling Regionals: Fairfax Starts NZ Endgame

Fairfax Media Group will close or sell 35 percent of its New Zealand print titles as the Australian group pursues a digital strategy for the kiwi unit, now rebranded Stuff. More>>

Fletcher Building: Norris Steps Down As Chair After New $486M Loss Provision

Ralph Norris will step down as chairman of Fletcher Building after the company took a further $486 million provision for project losses at its Building + Interiors unit and said 14 of the unit's 73 projects, worth $2.3 billion, are loss-making or 'on watch'. More>>


WWF: Concerns With Suggestion To “Scrap” Fishing Monitoring

“Our Pacific neighbours, like Fiji and the Solomon Islands, are making this work with far less economic resources than New Zealand. There’s no reason the government can’t get this done by October.” More>>


Stink one!: Stink Bug Invasion Could Cost NZ Billions

An invasion of the brown marmorated stink bug - the pest discovered recently in three Japanese car shipments - would devastate New Zealand's fruit, vegetable and wine industries, destroying more than $4 billion of export value and costing thousands ... More>>