In what ASB economists describe as "an important watershed", for the first time in 18 months, more Kiwis are expecting house prices to rise than fall.
In the ASB's latest quarterly Housing Confidence Survey, ASB economist Nat Keall says a net 34% of New Zealanders expect housing prices to rise from here.
That's up from a net -8% reading in the previous survey and a net -43% reading - IE a net 43% expected falling prices - at the start of the year.
"...This is the first time since April 2022 that those expecting prices to rise has outstripped those expecting them to decrease - an important milestone," Keall said.
"With recent data generally showing prices no longer falling, Kiwis tend to think the housing market has reached a turning point. We agree, though there is plenty of uncertainty in terms of how strong the recovery will be," he said.
"Aucklanders continue to be the most bullish in their house price expectations, in a continuation of the theme we saw last quarter. That remains unsurprising, given housing market activity has recovered a little bit more swiftly than elsewhere in Godzone. That said, this quarter’s shift is very much a national story."
Keall said with net migration proving extremely strong and housing inventory stabilising, the main constraint on the housing market at the moment is the high level of mortgage rates.
"Kiwis don’t seem to anticipate much of a shift on that front just yet. While the net balance of respondents expecting further interest rate increases has shrunk a bit, that looks to have largely been driven by an increase in the number of people expecting rates to stay the same, rather than increase. Just 15% expect much of a fall in interest rates in the near-term. Again, we largely agree."
Keall said Kiwis are still split on whether now is a ‘good’ time to buy.
"Our poll took place at a time of heightened uncertainty, with the election campaign in full swing and the parties setting out their housing market policies. With the tax and regulatory landscape coming into clearer focus, we’ll soon get a better steer on how Kiwis are likely to respond."
ASB economists agree that prices will rise from here, though they expect this house price uptick to be slower than the last one.
"Housing market activity measures appear to be lifting slowly off a fairly low baseline, despite a recent pause over the election campaign. Housing demand has had a big boost from stronger net migration and supply isn’t keeping pace. On the other hand, interest rates are still in deeply restrictive territory, acting as a major constraint on activity," Keall said.
38 Comments
Yes I just had another scroll through there just now. There's one post where, it appears, the person has their 3.5 investment properties and primary residence under LLC's. I imagine they've done this to claim deductions against their primary residence. Just don't let IRD find out!!!!
They want to buy a $250k piece of land for $200k, but despite having $2m of assets churning $85k p.a. they have $20k to their name, are self employed and have a bad credit rating due to "putting a tenant's power in their own name" so need recommendations on places who will lend to them.
The problem is if enough people believe in something like this they will be willing to pay higher prices making house prices go up. Irrelevant of the actual merit of the house prices. See crypto, tulips, beanie babies etc as evidence.
That's why people keep talking up property, because it works, well until other forces finally over power the wishful thinking.
That comment aged really badly
https://www.interest.co.nz/personal-finance/125777/pre-christmas-move-o…
Interest rates back at "normal" levels, more cheap debt rolling off to today's rates, DTI inbound in three months, employment mandate gone =more unemployment, skilled youth exiting in quantity to Straya never to pay a tax dollar here again, and immigration tap set to flood mode - perhaps specuvestor's can have 10-20 deep per house to make the numbers stack...?
Housing to boom...cant see it. That said I also cannot see the cost of construction having a huge decline so who knows.
Edit: All it would take is a couple of tankers to catch fire or blow up as they transit the Red Sea to send oil prices soaring. Almost everything in NZ that moves would be effected. It would underpin mass inflation = HFL.
First mortgage rate drops are actually the word of the day.
https://www.interest.co.nz/personal-finance/125777/pre-christmas-move-o…
If house prices go up I don't know what we will do. Just finished up-skilling/studying, am in my late 20's, landed some work and we are resuming saving for a deposit now. Will have to push having kids a few more years at this rate. Some days I just want to become a hermit screw the houses, screw the banks. Screw it all.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.