New Zealanders continue to expect house prices to rise, especially if they live in Christchurch or Auckland.
A net 48 per cent of respondents in the latest ASB Housing Confidence Survey expect house prices will increase.
That’s similar to the previous three quarterly surveys, but a decline from late 2013 when a net 63 per cent expected house prices to increase.
House price expectations remain highest in Auckland where a net 56 per cent of respondents expect a rise, followed by Christchurch with net 51 per cent of respondents.
“Housing supply shortages and population growth are not expected to ease much over the coming year in the two main centres so it’s likely price expectations and actual house prices will continue to remain high there,” says Nick Tuffley, ASB’s chief economist.
The median house price in Christchurch has recently moved higher than Wellington’s but rising mortgage rates, expensive housing and lending restrictions have all affected the mood of the market generally.
Mr Tuffley says the lack of supply can be frustrating for buyers, in Auckland and Canterbury in particular.
“Accordingly, we think it is a key contributing factor to the view that now is a bad time to buy, and something that is unlikely to change over the coming months.”
Interest rate increases earlier in the year have added to the affordability strain, although the recent declines in some term rates will provide some relief on this front.
“House prices can and do fall, but right now there is no obvious catalyst for a decline.”
- net 48 per cent expect house prices to increase
- net 55 per cent expect interest rates to rise
- a net eight per cent of respondents believe now is a bad time to buy.