EMARGOED UNTIL 5am MONDAY 12 AUGUST 2013
House price expectations remain high
House price expectations remain high over the three
months to July.
• Housing confidence declines again as fewer respondents see now as a good time to buy.
• Interest rate expectations edge higher, with OCR increases likely from March 2014.
House price expectations remain high according to the latest ASB Housing Confidence Survey. In the three months to July, a net 56% of respondents said they expect prices to rise over the next 12 months.
ASB Chief Economist Nick Tuffley says, “Fundamentals, such as income and population growth and relatively low interest rates, will continue to support housing demand over the coming year.”
While house price expectations edged slightly lower in the three months to July, this appears to be influenced by a change in survey methodology. Mr Tuffley says, “Net price expectations remain highest in Canterbury and Auckland, where the housing market remains tightest and house prices are rising rapidly.”
The tight housing market has resulted in fewer respondents viewing now as a good time to buy. A net 0% of respondents believe now is a good time to buy, compared to a net 8% in the three months to April.
Mr Tuffley says the results reflect the current housing landscape, “While housing demand has increased, new supply has remained at historically-low levels. With more potential buyers chasing the few properties listed, competition has bid up prices and reduced negotiating power.”
Interest rate expectations lifted in the three months to July, with net 39% of respondents expecting interest rates to rise over the next 12 months.
“This is consistent with our view the RBNZ will start to lift the Official Cash Rate (OCR) from March 2014. Some fixed-term mortgage rates have started to increase to reflect the likelihood of a higher floating rate in the future,” concludes Mr Tuffley.
The full ASB NZ Housing Confidence Survey report: