The number of people expecting interest rates to fall further was at a record high in the third quarter of this year, according to ASB's third quarter (Q3) Housing Confidence Survey.
Of the survey's 2920 respondents, a net 57% expected interest rates to fall, the highest that number has been since the survey began 28 years ago.
However, expectations around house price growth and whether it is a good time to buy were much lower.
A net 24% of respondents thought house prices would rise, up from 13% in the Q2 survey.
Optimism around price increases was particularly strong in Auckland where a net 29% of respondents expected house prices to rise, also up from 13% in the previous quarter.
And a net 20% think now is a good time to buy a house, although the proportion who were undecided about whether it was a good time to buy increased marginally from 47% in Q2 to 48% in Q3.
ASB Senior Economist Kim Mundy said while the data was encouraging and wasn't surprising given the substantial decline in mortgage rates since mid-July, expectations for house price gains were growing at a relatively slow pace.
"Our survey data shows overall confidence levels remain lower than what we observed at the start of the year, 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," Mundy said.
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15 Comments
"...New Zealanders may be concerned about other economic impacts that may hinder house price gains, such as rising unemployment and slowing net migration," Mundy said."
No, out of touch economist, NZers do not spend any time thinking about net migration, just like they don't make inflation forecasts.
I would like to agree with you.
However, a good proportion of existing homeowners in this country believe that mass low-skilled migration and cheap credit pumping up the price of the country's housing stock is actually making them "wealthier". That's why consumer confidence in NZ's economy rises and falls with house prices, i.e., RBNZ's wealth effect experiment.
The problem is if you want house prices to go down you're dubbed a DGM. There's no benefit for society to have high house prices, people just cut their spendings on cars, leisure, restaurants and more globally everything else.
I do NOT expect rates to rise, but neither do I think real estate will. Careful about the figures, I've noticed less properties on the market in my area, but that's not due to more sales or fewer new listings but to properties being withdraw after 3/6 months on the market.
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