13 May 2014

House price expectations slip

6:53 am on 13 May 2014

The house price expectations of many New Zealanders remain elevated, but have fallen from last year, and more people now expect interest rates to continue rising.

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Photo: PHOTO NZ (file photo)

The latest ASB survey on housing confidence over the three months to April showed sentiment was still negative, with a net 4 percent of people thinking now is a bad time to buy, fewer than in recent surveys.

A net 48 percent of respondents think house prices will increase, and while the bank said this was high by historical standards, it has eased back because of activity in the market had moderated.

ASB chief economist Nick Tuffley said the survey's results showed the housing market had been resilient in the first few months of the year, despite rising interest rates.

"When we look back at last year we did certainly see the peak of house price expectations at a high level," he said.

"We have seen house price growth slow a bit since then ... what the survey is saying is that prices are still likely to go up - not quite at the rate that we saw last year, but still at a decent clip".

But Mr Tuffley said that another factor was that it was now slightly easier for people to find a house they wanted.

"We have seen a bit of lift in the number of houses that are for sale, at the same time that the price growth is slowing a little bit.

"That's one thing that does seem to impact a lot on people's perception of whether it's a good or bad time to buy a house: how easy is it to find the house that youw want, and once you've found it, how quickly do you have to pounce?," Mr Tuffley said.