Housing confidence improves

Friday 7th August 2009

New Zealand housing market confidence has improved, with expectations for prices moving up to about neutral and more people deeming it a good time to buy, according to the ASB Housing Confidence survey.

A net 54% of those surveyed regarded now as a good time to purchase a house in the three months through July, from a net 46% in the three months to April, the survey showed. A net 4% of those polled say prices may decline, an improvement from the 45% who saw prices falling three months earlier.

“After over a year of expecting prices to fall in the year ahead, respondents have a more neutral outlook,” said Nick Tuffley, ASB’s chief economist. The survey “reinforces that confidence is building, along with a sense that price falls are coming to an end,” he said.

Still, the next housing cycle will be “very weak” compared to the 2002-2007 boom.

The survey shows more people believe cuts to interest rates have come to an end after the central bank lowered the official cash rate to a record low 2.5% this year.

A net 3% now believe interest rates will rise, compared to a net 30% seeing a decline three months earlier.

ASB said lower mortgage rates have helped drive sales while lack of new listings has helped underpin prices. Lack of new properties coming on the market may be about to change though.

New listings in Auckland climbed 17% in July from June to 1,386, according to figures from real estate firm Barfoot & Thompson this week.

Property values have been improving and the market is showing signs of stabilising due to an increase in net migration and a shortage of new housing, according to QV Valuations data last month.

ASB’s report today showed Auckland was slightly less bullish than the rest of the country, with 47% of those polled thinking it a good time to buy a house, compared with a net 56% for the rest of the North Island and 57% for the South Island.

Businesswire.co.nz

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