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

 

Ruataniwha: Greenpeace Launches Legal Challenge Against $1b Dam Plan

Greenpeace NZ is launching a legal challenge against a controversial plan to build a dam that’s set to cost close to $1 billion and will pollute a region’s rivers. More>>

ALSO:

Inequality: Top 10% Of Housholds Have Half Of Total Net Worth

The average New Zealand household was worth $289,000 in the year to June 2015, Statistics New Zealand said today. However wealth was not evenly distributed, with the top 10 percent accounting for around half of total wealth. In contrast, the bottom 40 percent held 3 percent of total wealth. More>>

ALSO:

What Winter? Temperature Records Set For June 20-22

The days around the winter soltice produced a number of notably warm tempertaures. More>>

Conservation Deal: New Kākāpō Recovery Partnership Welcomed

Conservation Minister Maggie Barry says the new kakapo recovery partnership between DOC and Meridian Energy is great news for efforts to save one of New Zealand’s most beloved birds. More>>

ALSO:

Tech Sector Report: Joyce Warns Asian Tech Investors View NZ As Hobbits And Food

Speaking in Wellington at the launch of a report showcasing the value of the technology sector to the New Zealand economy, Joyce said more had to be done to tell the country's technology stories overseas. More>>

ALSO:

Mediaglommeration: APN Gets OIO Approval For Demerger Plan

APN News & Media has received Overseas Investment Office approval for its plan to split out its NZME unit ahead of a potential merger with rival Fairfax Media's New Zealand operations. More>>

New Paper: Ninety-Day Trial Period Has No Impact On Firms' Hiring

The introduction of a 90-day trial period has had no impact on hiring by New Zealand companies although they are now in widespread use, according to researchers at Motu Economic and Public Policy Research. More>>

ALSO:

Corrections: Serco Exits Equity Stake, Remains As Operator

Serco has sold its equity stake in the company that holds the contract to design, build and run Wiri Prison in South Auckland but continues as sub-contractor to operate the facility. More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news