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

 


ASB Housing Confidence Survey – three months to April 2014

Media Release
ASB Housing Confidence Survey – three months to April 2014
EMBARGOED UNTIL 5am Tuesday May 13 2014


Price gains still expected in tight market

House price expectations remained high over the three months to April
Less pessimism about whether it’s a good time to buy a house
Expectation for interest rate hikes leaps to 70%

House price expectations remain elevated
House price expectations remain elevated in the latest ASB Housing Confidence Survey, with a net 48% of respondents expecting house prices will keep rising higher in the year ahead.

Although that is slightly below where expectations were sitting at the same time last year, it is still a high reading by historical standards for the survey, which dates back to 1996.

ASB Chief Economist Nick Tuffley says the New Zealand housing market remains tight, with the level of house listings remaining at extremely low levels by historical standards.

“But the slight easing in price expectations is occurring at a time where we are also observing a slightly lower level of sales. Some respondents are likely expecting some moderation after the price rises recorded over the last year or so, but very few expect prices to fall,” Mr Tuffley says.

Expectations of house price gains are still the strongest in Canterbury, although not as bullish as a year earlier.

Greater expectation for interest rate hikes
Expectation is also growing for interest rates to keep rising over the next 12 months,
with a net 70% of respondents expecting interest rate hikes, as opposed to 55% in the February survey.

“The increase in the Official Cash Rate at the Reserve Bank of New Zealand’s March 13 meeting was well signalled over the preceding months. However, there is nothing like an actual mortgage rate increase to convince homeowners that rates are rising,” Mr Tuffley says.

“Back in January, a net 51% expected higher interest rates over the coming year. That was quite a high number, but in the April quarter survey that number has jumped to 70%. The RBNZ continues to signal it expects to deliver further hikes over the next few years. Borrowers are getting that message loud and clear.”

Is it a good time to buy? Sentiment not quite as negative
Sentiment about buying a house has improved over the last three months, but still remains negative, with a net 4% of respondents believing now is a bad time to buy. That’s a small improvement on the net 9% recorded in the February survey.

Auckland and Christchurch remain the most pessimistic - cities where the housing market is the tightest.

“A net 4% of respondents now believe it is a bad time to buy. That’s a slight improvement on the preceding quarter, but it is still a weak result. The combination of high house prices and increasing interest rates is not great for house affordability – the mix continues to weigh on confidence,” Mr Tuffley says.

The divergent sentiment around the country reflects the different dynamics at play in each region. While the high LVR restrictions and mortgage rate increases are common to all markets, factors such as house prices and affordability, the rate of house price appreciation and the supply/demand balance all vary from region to region.

The RBNZ’s tightening cycle will push up mortgage rates, which in turn will help keep demand for housing in check. However, the supply side of the housing market equation is equally important. More dwellings need to be built to house New Zealand’s growing population and help restore balance to the market. The strong pick-up in building consents over the past year suggests this process is getting underway, but it needs to continue, Mr Tuffley says.

Results at a glance

• A net 48% of respondents expect house prices to increase in the next 12 months
• A net 4% of respondents believe now is a bad time to buy a house
• A net 70% of respondents expect interest rates to rise in the next 12 months

Note: The ASB Housing Confidence Survey is constructed from data received from 2394 individual respondents.

The full report is available online at www.asb.co.nz tomorrow.

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Sky City : Auckland Convention Centre Cost Jumps By A Fifth

SkyCity Entertainment Group, the casino and hotel operator, is in talks with the government on how to fund the increased cost of as much as $130 million to build an international convention centre in downtown Auckland, with further gambling concessions ruled out. The Auckland-based company has increased its estimate to build the centre to between $470 million and $530 million as the construction boom across the country drives up building costs and design changes add to the bill.
More>>

ALSO:

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news