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

 


Price expectations remain firm in a challenging market

Price expectations remain firm in a challenging market

• Tight supply continues to drive expectations of increasing house prices

• Expectations of interest rate rises remain high

• The challenging conditions drove sentiment about buying a house to its lowest point since 2007

Buyers becoming increasingly negative while house price expectations remain resilient
The mood of prospective homebuyers has hit its lowest point since 2007 according to the latest ASB Housing Confidence Survey.

ASB Chief Economist Nick Tuffley says a net 11% of all respondents are seeing now as a bad time to buy.

“Recent interest rate rises, the steady increase in house prices and lending restrictions have all combined to create a growing mood of pessimism amongst prospective buyers.”

Tuffley notes that sentiment has most notably declined in Auckland with a net 21% seeing now as a bad time to buy, compared to a net 10% in April’s survey.

“Auckland continues to record stronger house price gains than anywhere else in the country while a lack of housing supply is likely causing frustration for buyers in both Auckland and Canterbury.”

The view that house prices will continue rising remains prevalent nationwide with a net 49% of respondents expecting house prices to increase.

“Despite the OCR rises earlier in the year and subsequent flow on effect to mortgage rates, New Zealanders remain confident that house prices will continue to increase.”

“Again, this is evident in Auckland and Canterbury, where demand is the hottest and where other housing pressure points such as increased migration come into play. However, outside of these two centres, house price expectations are elevated when compared to the relatively modest gain in actual prices.”

Housing supply provides challenge for buyers
Housing supply remains a factor impacting both house price expectations and housing market sentiment.

“There are a low number of houses for sale nationwide. Supply will lift gradually as construction picks up, but this process will take time. Throw into the mix the good performance of the economy, and we see no immediate driver for house prices to fall or interest rates to come down in the near future.”

“Consequently, we feel that affordability issues are likely to impact housing market sentiment for the next year or two.”

Interest rates
Expectations that interest rates will continue to rise remain high with a net 69% expecting interest rate hikes.

“We agree with the majority of respondents who expect interest rates to continue to rise, however we are expecting the RBNZ to hold off raising the OCR again until early 2015. We anticipate the RBNZ will lift the OCR to 4.5% over 2015, a further 1% above current levels, which would result in further mortgage rate increase for borrowers.”

Results at a glance

• A net 49% of respondents expect house prices to increase in the next twelve months;

• A net 69% of respondents expect interest rates to rise in the next twelve months; and

• A net 11% of respondents believe now is a bad time to buy.


ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Cosmetics & Pollution: Proposal To Ban Microbeads

Cosmetic products containing microbeads will be banned under a proposal announced by the Minister for the Environment today. Marine scientists have been advocating for a ban on the microplastics, which have been found to quickly enter waterways and harm marine life. More>>

ALSO:

NIWA: 2016 New Zealand’s Warmest Year On Record

Annual temperatures were above average (0.51°C to 1.20°C above the annual average) throughout the country, with very few locations observing near average temperatures (within 0.5°C of the annual average) or lower. The year 2016 was the warmest on record for New Zealand, based on NIWA’s seven-station series which begins in 1909. More>>

ALSO:

Farewell 2016: NZ Economy Flies Through 2016's Political Curveballs

Dec. 23 (BusinessDesk) - New Zealand's economy batted away some curly political curveballs of 2016 to end the year on a high note, with its twin planks of a booming construction sector and rampant tourism soon to be joined by a resurgent dairy industry. More>>

ALSO:


NZ Economy: More Growth Than Expected In 3rd Qtr

Dec. 22 (BusinessDesk) - New Zealand's economy grew at a faster pace than expected in the September quarter as a booming construction sector continued to underpin activity, spilling over into related building services, and was bolstered by tourism and transport ... More>>

  • NZ Govt - Solid growth for NZ despite fragile world economy
  • NZ Council of Trade Unions - Government needs to ensure economy raises living standards
  • KiwiRail Goes Deisel: Cans electric trains on partially electrified North Island trunkline

    Dec. 21 (BusinessDesk) – KiwiRail, the state-owned rail and freight operator, said a small fleet of electric trains on New Zealand’s North Island would be phased out over the next two years and replaced with diesel locomotives. More>>

  • KiwiRail - KiwiRail announces fleet decision on North Island line
  • Greens - Ditching electric trains massive step backwards
  • Labour - Bill English turns ‘Think Big’ into ‘Think Backwards’
  • First Union - Train drivers condemn KiwiRail’s return to “dirty diesel”
  • NZ First - KiwiRail Going Backwards for Xmas
  • NIWA: The Year's Top Science Findings

    Since 1972 NIWA has operated a Clean Air Monitoring Station at Baring Head, near Wellington... In June, Baring Head’s carbon dioxide readings officially passed 400 parts per million (ppm), a level last reached more than three million years ago. More>>

    ALSO:

    Get More From Scoop

     
     
     
     
     
     
     
     
    Business
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news