People are still mostly optimistic about the housing market outlook, although there has been some loss of momentum, according to ASB's latest Housing Confidence Survey.
For the sixth consecutive quarter, this one covering the three months to the end of January, people remain optimistic about house prices. A net 33% of respondents expect house prices to increase, although that's down from 44% over the same period a year earlier.
That decline in optimism appears to have mostly happened late in the last quarter, with price optimists dropping from a net 37% in December last year to a net 28% in January this year.
Perhaps more surprising was a drop in the number of survey respondents expecting interest rates to decline, with a net 51% expecting further declines compared to a net 57% in the previous survey for the three months to October 2024.
However, the latest survey was undertaken before last week's Reserve Bank cut to the Official Cash Rate and its generally dovish outlook for the rest of this year.
"In the coming surveys, we expect softer expectations for lower interest rates in 12 months time - early 2026, reflecting concerns about a resurgence of inflation due to external influences," ASB's economists said in their report on the survey results.
Respondents were also generally positive about whether it was a good time to buy a home, with a net 23% indicating it was a good time to buy, the highest level of buying confidence since October 2012.
"In the coming surveys, we expect sentiment to remain positive about it being a good time to buy, although confidence levels may reduce slightly in accordance with expectations for house price gains and declines in interest rates," the report said.
"Additionally, in the lower mortgage rates environment, the debt-to-income restrictions have started to cap the amount of loans, which is likely to hinder the buying sentiment," the report said.
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26 Comments
Get in with a grin! 😁
TTP
#BeQuick!!
Given the number of signs popping up, I suggest that endurance is required not speed if you want to consider the plethora of properties suddenly on the market.
Not sure where you are in NZ, but not all 'markets' are the same, there is a huge amount of noise in indexes of you actually parse through them.
As an example, Auckland as a bucket has enormous variation in price brackets, suburbs and type of home.
You may not believe it, but Central Auckland freestanding homes right now that aren't run down dumps are selling for above 2021 CV prices right now.
As an example went to two open homes on the weekend and the foot traffic and overall interest for family homes is meaningful.
So the summary? There is nuamce to what is going on right now, if you are looking at buying a townhouse in Auckland, wait because there is a tidal wave of options. If you are buying a family home in Auckland in a good area, I'd be very weary playing the waiting game.
Take a look at Glendowie, lots of family homes for sale, 36 on trademe.
Not sure what you classify as a family home, but assume three bedrooms, I only saw 16 currently listed with many of those actually townhouses.
But anyway my point is that there is softness broadly, but property in good areas are still selling for some ridiculous prices.
As of last week a property just sold 13% above CV for a steet record and this isn't Herne Bay or St Heliers.
That would be a great line to use when you go to prison for real estate fraud.
Did you go to prison when you were convicted?
SKF
Any links for those that haven't been paying attention?
If I recall correctly, TTP is the guy involved in this,
https://comcom.govt.nz/case-register/case-register-entries/property-bro…
And to answer my own question, seems like no prison time, but he seems to have workshopped a good quip over the years.
SKF
So last year 44% of people thought housing would continue upwards. Would be interesting to see their sample population for that. If all housing speculators then that makes sence. If it was the average joe in the street then their surveys are not worth wiping your tail on.
Edit. looks like they borrowed the Du Val Rolls....#otherpeoplesmoney
Agree, its like some political polls sponsored by a party that asks their own party
BTW have you tried entering your new reduced property value in as an input to the LVR ratio rules - quite a constraint that many may not be aware of.
true if you want to purchase above CV, nd its high % of value loan, you will need independent bank valuation .....
If you have tons of equity you can normally tell ASB that you will not be getting a valuation and ask, do you want my business or not....
Will be a real issue for many.
33% is not 'generally'.
Generally pretty crap.
Urgh. smoke, mirrors. Seems very tough out in the economy at the moment, I don't get where this supposed positivity is coming from.
33% of people think house prices will rise. Does that mean 67% of people don't agree? How does only 33% of people thinking horse prices will go up equate to "mostly"?
67% people said neigh?
I hope the people buffing the results of this turd of a survey wear some very thick gloves.
Bank economists are like CCP stats releases.... always positive up 6%
More like 33% are in the shy####t and are hopeful property will rise.
https://www.nzherald.co.nz/business/personal-finance/treasury-consults-…
Home owners could be asked to fork out up to about $400 more a year to prop up the country’s state disaster insurer.
Treasury is consulting with a small group of stakeholders on whether to increase the Natural Hazards Insurance Levy, previously known as the EQC levy, which is tacked on to home insurance premiums.
It is also seeking feedback on increasing the amount of cover the Natural Hazards Commission (NHC) provides for residential buildings from $345,000 to $460,000 (including GST).
The most its proposals could cost home owners is $948 a year (including GST), 72% more than the current maximum.
Cabinet is expected to decide on a path forward in July, and changes would be implemented from next year.
Treasury, in its consultation document, warned the NHC is so underfunded, there’s only a 37% chance its levy income will meet its costs over the next five years.
The NHC must cover the first $2.1 billion of claims related to an event before it can tap into the $8.2b of reinsurance cover it has. However, it only has $550 million in its kitty.
So, in the event of a major disaster, it’s likely the Crown will have to step in to help cover its costs.
Is funding via insurance premiums the way to go? As I understand it the fire levy is paid via insurance however the fire service will still put out anyone's fire. More might choose to not insure.
As an aside, is there anything to stop one from getting insurance direct form an overseas agent and avoid local levy's?
I believe that insurance is regulated by the FMA? so I assume you may need a license to offer in NZ?
Peer to peer? Just wondering what would prevent that...and thus escape the growing local add-ons.
On that basis Fire levy should be part of property rates so no one can "avoid" paying.
"Treasury, in its consultation document, warned the NHC is so underfunded, there’s only a 37% chance its levy income will meet its costs over the next five years"
So 63% chance its levy income will not meet its costs over the next five years.
"The NHC must cover the first $2.1 billion of claims related to an event before it can tap into the $8.2b of reinsurance cover it has. However, it only has $550 million in its kitty"
Potential $1.55 bn liability payable by the Crown if an event occurs.
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