Unstoppable confidence in the housing market continues despite measures to cool price growth.
An apartment building under construction in Wellington. Photo: RNZ / Angus Dreaver
The ASB Housing Confidence Survey for the three months ended October indicating a net 62 percent of respondents expected prices to rise.
"Kiwis' housing confidence has remained stratospheric all year," ASB bank senior economist Mike Jones said.
That was up on a net 58 percent in the three months ended September.
"Credit rationing, tax changes, lockdowns - nothing has shaken the public's confidence that house prices are going to keep rising. And, so far, they've been right," he said.
However, he expected the Reserve Bank's plan to gradually raise interest rates would test that confidence.
"Wildly-stretched house prices paired with steep rises in mortgage rates are not a palatable combination for home buyers," he said.
Despite the increased price expectations, the perceptions of whether it was a good time to buy were within a whisker of the all-time low struck in October 2016.
A net 23 percent of respondents nationally thought it was a bad time to buy a house, in Auckland the measure was a net 19 percent.
"We wouldn't be surprised to see fresh lows before this cycle is done," Jones said.
"We suspect the house price upswing has got a little further to run, and the upward pressure on mortgage rates looks likely to remain."
"We think the pace of recent lifts in mortgage rates, and the prospect of more to come, will finally put the brakes on the feverish housing demand we've seen ever since lockdown 1.0."
