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Housing market confidence down
ASB says confidence in the housing market is on the wane as interest rates look set to rise.
According to the bank's latest housing confidence survey, a net 47 per cent respondents in the three months to January believed house prices would rise over the next year.
That was down slightly from a net 56 per cent in the previous quarter.
Realism was creeping in as people realised the strong price rises of the past year or so "cannot carry on forever", ASB economist Chris Tennent-Brown said.
The bank agreed, saying that although house prices would probably rise further this year, it believed the price gains had peaked.
Real Estate Institute figures out yesterday show the national median house price in January was $402,000, 8.6 per cent higher than a year earlier but 5.8 per cent down from December's record high.
The ASB survey showed those who believe it is a bad time to buy now solidly outweigh the optimists. Aucklanders and Cantabrians were the most negative, reflecting the tightness of their markets, Tennent-Brown said.
He said the high loan to value (LVR) lending restrictions appeared to have had some impact on buyers.
But he did not expect a "meaningful reduction" in market pressures until interest rates and construction increased.
ASB expects a 25 basis point rise in the official cash rate on March 13, with gradual hikes to 4 per cent by late next year.
- © Fairfax NZ News