Confidence In The Housing Market On The Rise

Tuesday, 26 November 2024, 8:19 am
Press Release: ASB

• More New Zealanders expect house prices to increase – a net 24 percent of respondents anticipate gains compared to 13 percent in the previous quarter.
• A net 57 percent of respondents expect lower interest rates, the highest rate recorded since the survey began in 1996.
• A net 20 percent of respondents believe it’s now a good time to buy, a significant jump from 8 percent last quarter.

ASB’s latest Housing Confidence Survey out today suggests momentum could start to build more noticeably in the coming months with Kiwi feeling increasingly positive about house price expectations, interest rates continuing to drop, and whether it’s a good time to buy.

Optimism is particularly strong in Auckland where a net 29 percent of respondents are expecting house price increases, up from 13 percent last quarter. Buyer sentiment in the region was also bullish with a net 24 percent of those surveyed believing it’s a good time to buy – the highest in the country. South Islanders are feeling similarly confident, with a net 29 percent of respondents also anticipating house price growth and positive buying sentiment jumping to a net 16 percent, up from 2 percent last quarter.

ASB Senior Economist Kim Mundy says while the data is encouraging to see and isn’t surprising given the substantial decline seen in mortgage rates since mid-July, expectation for house price gains are growing at a relatively slow pace.

“While the housing market is certainly poised to pick up, and REINZ data shows sales activity is already on the rise, it may take some time before this translates into a pronounced upswing in house prices.

“Our survey data shows overall confidence levels remain lower than what we observed at the start of the year (close to 72 percent of those surveyed expect house prices to remain flat or rise, compared to 90 percent in Q1 2024) which suggests New Zealanders may be concerned about other economic impacts that may hinder house price gains such as rising unemployment and slowing net migration,” says Mundy.

For those considering buying a home, falling interest rates, plentiful supply and subdued house prices are supporting positive sentiment with a net 20 percent of respondents thinking it’s a good time to buy, up from 8 percent last quarter. While more people shifted their opinion from it being a “bad” to a “good” time to buy this survey round, a significant number of respondents (48 percent) remain undecided.

“With another 50bps cut to the Official Cash Rate (OCR) forecast this week and further cuts anticipated in 2025, we expect New Zealanders’ expectations around each of the metrics we track against to evolve in line with our view that we’ll start to see higher house prices in 2025,” says Mundy.

The ASB Housing Confidence Survey canvasses thousands of Kiwi across the country each quarter on their view of the housing market and future expectations. The full ASB survey along with other recent ASB reports covering a range of commentary, can be accessed at our ASB Economic Insights page: https://www.asb.co.nz/documents/economic-insights.html

@ASBBank @ASBMarkets www.asb.co.nz

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