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

 

ASB Housing Confidence Survey - Are the good times over?

Embargoed Media Release
ASB Housing Confidence Survey

EMBARGOED until 0500 Wednesday, November 9, 2016

Are the good times over?

• Buyer sentiment drops to a 20-year low

• Expectations for house prices to rise moderate, but remain high; fewer people expect interest rates to fall

• Latest LVR restrictions appear to be having a greater impact on investors outside of Auckland

Buyer sentiment has tumbled to a historical low in the ASB Housing Confidence Survey.

The October quarter report finds a net 26 per cent of people think it’s a bad time to buy a house, compared to a net 20 per cent three months earlier.

It is the weakest sentiment since the survey started in 1996.

While buyer sentiment remains lowest in Auckland (-33%), other regions registered the sharpest falls this quarter.

Excluding Aucklanders, 10 per cent of New Zealanders say it’s a good time to buy a house (compared to 13% last quarter) and 35 per cent (33%) say it is a bad time to buy.

ASB chief economist Nick Tuffley says ongoing expectations of house price increases, and higher debt servicing costs, appear to have been subduing buyer sentiment this year.

But the latest loan-to-value ratio (LVR) restrictions, introduced in October, appear to have pushed sentiment lower, particularly outside Auckland.

“The fact that the 40 per cent investor deposit requirement is having a proportionately larger impact on investors outside of Auckland could explain why sentiment dropped more in other regions this quarter,” Mr Tuffley says.

On the other hand, if the new restrictions slow market activity and house price growth over time, potential first home buyers might begin to look more favourably on the housing market, Mr Tuffley says.

“However, first home buyers may remain cautious given recent house price appreciation, and they are also likely to be wary of perceived changes in borrowing costs. All up, high house prices and a higher deposit threshold for investors are likely to weigh on sentiment this year.”

Tempered house price expectations

Most respondents are still expecting house prices to rise. However, net house price expectations have dropped from recent highs. On balance, a net 58 per cent expect higher prices (61%).

The South Island, excluding Canterbury, was the only region where net expectations of house price increases lifted to a net 66 per cent (56%).

People see interest rates as largely steady

Few respondents expect interest rates to fall.

On balance, respondents expect interest rates to either remain steady or increase.

“This is likely to be because the previous two OCR cuts were associated with little downward movement in mortgage rates,” Mr Tuffley says.

“We continue to expect the RBNZ to cut the OCR by 25bp on Thursday (November 10), but due to funding issues, we don’t expect floating mortgage rates to move to the same extent. Term mortgage rates have started to creep up.”

Results at a glance


Click for big version.


Click for big version.

Note: The ASB Housing Confidence Survey is constructed from data received from 2730 individual respondents.

The full housing confidence report for the three months to October 2016 is attached and will be available online atwww.asb.co.nz tomorrow.

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Superu Report: Land Regulation Drives Auckland House Prices

Land use regulation is responsible for up to 56 per cent of the cost of an average house in Auckland according to a new research report quantifying the impact of land use regulations, Finance Minister Steven Joyce says. More>>

ALSO:

Fletcher Whittled: Fletcher Dumps Adamson In Face Of Dissatisfaction

Fletcher Building has taken the unusual step of dumping its chief executive, Mark Adamson, as the company slashed its full-year earnings guidance and flagged an impairment against Australian assets. More>>

ALSO:

No More Dog Docking: New Animal Welfare Regulations Progressed

“These 46 regulations include stock transport, farm husbandry, companion and working animals, pigs, layer hens and the way animals are accounted for in research, testing and teaching.” More>>

ALSO:

Employment: Most Kiwifruit Contractors Breaking Law

A Labour Inspectorate operation targeting the kiwifruit industry in Bay of Plenty has found the majority of labour hire contractors are breaching their obligations as employers. More>>

ALSO:

'Work Experience': Welfare Group Opposes The Warehouse Workfare

“This programme is about exploiting unemployed youth, not teaching them skills. The government are subsidising the Warehouse in the name of reducing benefit dependency,” says Vanessa Cole, spokesperson for Auckland Action Against Poverty. More>>

ALSO:

Internet Taxes: Labour To Target $600M In Unpaid Taxes From Multinationals

The Labour Party would target multinationals operating in New Zealand to ensure they don't avoid paying tax if it wins power and is targeting $600 million over three years through a "diverted profits tax," says leader Andrew Little. More>>

ALSO: