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Aucklanders are the most confident about future price rises, the end of interest rate rises, and that it was a good time to buy. File photo.
Photo: RNZ / Nate McKinnon
Housing confidence has lifted to its highest level in more than two years as people accept the housing downturn is over, but there is still a large degree of caution about the future.
ASB’s January Housing Confidence Survey showed 51 percent of respondents expected house prices to rise – the highest since October 2021 – compared with 34 percent in the October survey, with annual price growth of 2.2 percent.
Fewer people expected interest rates to rise, falling to 15 percent from 28 percent, but fewer also thought it was a good time to buy a house, 2 percent from 6 percent.
ASB senior economist Kim Mundy said house price expectations were a pointer of the trend and not a reflection of the state of the market.
“While house prices are likely to continue rising, we’re not forecasting the type of growth we saw in the last upswing over 2020 and 2021, with still-high interest rates acting as a powerful market moderator.”
Mundy said the survey showed an increasing number believe interest rate rises were close to peaking, although respondents remained ready for further rates.
“The upshot is that even in the absence of more hikes, it could still be quite a few months before mortgage interest rates fall from current levels.”
The prospect of debt-to-income ratios from the middle of the year and prospective changes to tax rules for property investment were also adding caution to the market.
Aucklanders were the most confident about future price rises, the end of interest rate rises, and that it was a good time to buy.
Mundy said the survey offered conflicting signals for prospective buyers, which might add to the caution, but any market pick up might alert the Reserve Bank to inflation risks.
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