ASB NZ Housing Confidence Survey

Monday, 9 August 2010, 9:16 am
Press Release: ASB Bank

Media release
ASB NZ Housing Confidence Survey

EMBARGOED TILL 0400 MONDAY 9 AUGUST

Housing confidence static while price expectations slide


• Housing confidence static but still relatively upbeat.
• Price expectations remain positive but fewer people expect increases.
• Looming interest rate increases pulling down optimism.

House price expectations continued to fall over the last quarter while housing confidence remained steady, according to the latest ASB NZ Housing Confidence Survey.

ASB Chief Economist Nick Tuffley says that housing confidence was unchanged during the three months to July, with a net 29 percent of respondents still saying that now is a good time to buy a house. However this is tempered by a slide in perceptions around house prices.

“Expectations for further rises in house prices have fallen across the regions, with the decline particularly evident in Auckland,” he says. “A net 19 percent of people we surveyed across New Zealand expected prices to increase, down from a net 35 percent last quarter. The South Island continues to have the highest price expectation across the regions.”

The survey also shows growing awareness across the regions of future interest rate rises, which is likely to be pulling down optimism.

“Almost three quarters of respondents expect interest rates to rise,” Mr Tuffley says. “This result is in line with recent data showing signs of a continued slow down in housing market activity. Nonetheless, house prices remain resilient even though potential sellers appear to be holding off putting their houses on the market. “

He says the median number of days taken to sell a house has continued to edge up and is now above the long-term average.

“We expect the outlook for the housing market will remain subdued given waning housing turnover. Beyond 2010, we forecast weak house price growth, tempered somewhat by population growth and net migration,” Mr Tuffley says.

ENDS

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