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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