House prices expected to keep rising
A growing number of people think house prices will rise in the next 12 months, but fewer people expect interest rates to rise, according to a bank survey.
ASB Bank's latest housing confidence survey shows that 61 per cent of people expected higher house prices in the coming year, up from 57 per cent in the previous quarter.
Just 11 per cent of those surveyed expected house prices to fall, giving a net 51 per cent expecting a rise in prices, up from a net 45 per cent last survey.
Demand for houses had picked up recently, but new listings and stock on the market remained at low levels, which had seen an uptick in prices ASB said.
ASB Bank itself is picking a 4 per cent rise in house prices nationally in the coming year, though prices were expected to rise more in Auckland, reflecting a tighter market than elsewhere.
Prices in Christchurch would keep being pushed up because of the shortage of habitable property after the earthquakes last year.
The latest ASB survey shows "further price increases are firmly embedded in households' expectations".
A net 58 per cent of Aucklanders expected house prices to rise, while a whopping net 77 per cent of Christchurch people expected prices to go up.
"Buyers in Auckland are increasingly under the impression that the market is weighted in favour of sellers," ASB said.
Some buyers might feel the market was becoming "too pressured or unaffordable" but others would be attracted by the chance of capital gains.
Interest rate expectations have dropped sharply in the latest survey, given a more uncertain international picture, and recent cuts to some fixed-term mortgage rates ASB said.
Some 37 per cent of those surveyed expected higher interest rates, compared with 48 per cent in the previous quarter.
The survey showed 16 per cent expected lower rates, compared with 5 per cent last survey. The balance said rates would remain the same or didn't know.