Housing market confidence down

Last updated 05:00 15/02/2014

Relevant offers

Find a Home

More houses, selling faster Property market cooling Migration boom may stoke housing market Housing standards worry advocates Rental agents 'milking' tenants Reminder of Cold War era back on the market Tsunami line proves no bar to a good house price Expensive apartments selling fast Southland ranks third for home ownership House prices recover, but apartments lag

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.

Ad Feedback

- BusinessDay

Special offers

Featured Promotions

Sponsored Content