Price hopes plunge
A bank survey suggests first-home buyers are hanging back in areas where prices look to be falling.
Kiwis are fast losing confidence in the housing market. ASB’s latest housing confidence survey shows house price expectations have fallen for the fifth quarter in a row to a six-year low.
A net 17 per cent of respondents expect higher house prices over the next year, compared with 32 per cent last quarter.
Auckland’s expectations are even lower, at 9 per cent expecting increases.
‘‘First, loan-to-value ratio restrictions and slightly higher mortgage rates were causing most of the softness. But in recent months, uncertainty around the election has seen the market slow even further,’’ ASB chief economist Nick Tuffley said.
He said expectations were likely to remain muted.
Economist Kim Mundy said the housing market had been softening for about 12 months and respondents seemed to have noticed that prices had started to fall in some parts of the country.
She said ASB’s economists expected house price growth to remain soft into 2018, until the effects of the new government’s housing policies became clear.
Around the country, most people think it is a bad time to buy. Sentiment is at -11 per cent. A reading of zero would indicate respondents were evenly split.
The exception is Christchurch, where more people think it’s a good time than bad.
Mundy said there were a number of things that would affect this perception. In Auckland, even though prices had fallen, they were still near historic highs and unaffordable for many, she said.
In other areas, people might think prices could fall further, and so would not think it was a good time to buy because of that.
Most people are still expecting higher interest rates over the next 12 months, but expectations have eased from the highs of earlier this year.