House price expectations at record level
House price expectations have reached the highest level ever in the 17-year history of the ASB Housing Confidence Survey.
In the three months to April, a net 63 per cent of respondents expected prices to rise during the next 12 months, above the previous peak of 61 per cent in January 2003.
ASB chief economist Nick Tuffley said the strongest lift in expectations came from the South Island.
House price expectations in Auckland and Christchurch remained elevated, with 66 per cent expecting prices in Auckland to rise, and 79 per cent expecting those in Christchurch to increase.
Supply constraints in both cities had resulted in double digit-growth in prices, Tuffley said.
The lack of new listings and strong competition were affecting housing confidence, he said.
The number of respondents who saw now as a bad time to buy increased to 20 per cent from 18 per cent in the previous quarter.
Tuffley said housing confidence was still positive outside of Auckland and Christchurch, but it was declining as demand and prices increased across the country.
Interest rate expectations edged slightly higher during the quarter.
Those surveyed were split between expecting interest rates to increase in the next 12 months (38 per cent), or to remain unchanged (37 per cent).
Increased Reserve Bank concern around housing market pressures and increased Canterbury reconstruction activity were driving the expectation of a lift in interest rates, Tuffley said.
But ASB is forecasting the Reserve Bank will not increase the Official Cash Rate until March next year.
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