22 May 2018

Housing confidence bounces back in new survey

9:44 am on 22 May 2018

Housing market confidence has bounced off the six-year lows seen after the election, but there are signs that the pace of growth is probably past its peak.

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Photo: RNZ / Cole Eastham-Farrelly

ASB Bank's new property confidence index showed 32 percent of people expecting house values to rise over the coming quarter, [https://www.radionz.co.nz/news/business/350820/property-sector-takes-price-confidence-hit double the level in the January survey, which was the lowest since mid-2011.

Expectations were strongest in the regions, which were catching up to the main centres.

"Less upbeat house price expectations for Auckland and Canterbury are consistent with broadly flat observed house prices," said ASB chief economist Nuck Tuffley.

"Conversely, stronger house price expectations for the rest of the country are consistent with sizeable house price increases observed outside of the major urban areas."

Those expecting higher prices were still down 10 percentage points on a year ago, which Mr Tuffley said indicated price increases were past their peak.

Six percent said it was a bad time to buy a house, which was fractionally less pessimistic than the two-year low touched in January.

"We believe it signals that although respondents are generally cautious on the outlook, there is slowly growing confidence that a soft landing for the housing market could be achieved," Mr Tuffley said.

About a third of respondents said the next move in interest rates will be higher.

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