Cantabrians are the most optimistic that now is a good time to buy a house, according to the latest report from ASB.
ASB’s Housing Confidence Survey suggests that Christchurch remains the only region where the majority of respondents (a net 6 %) consider it a good time to buy.
“In fact, the net balance for the region is the highest since early 2011, suggesting market conditions for buyers are the most favourable since the devastating February 2011 earthquake,” ASB chief economist Nick Tuffley said.
In most other regions pessimists outnumber optimists, with 14% of respondents nationwide saying it’s a good time to buy, while 20% of nationwide respondents say it’s a bad time. However, there are signs this pessimism is abating, with the net balance considerably less negative than it was a year ago (-17%).
“It’s the least negative net balance in two years and we believe it signals that although respondents are generally cautious on the outlook, there is slowly growing confidence that a soft landing for the housing market could be achieved,” Tuffley explained.
Despite recent fall in interest rates, the survey shows that most people (32%) expect higher interest rates over the next 12 months.
“Indeed, we expect the OCR to move up from August 2019, but assume a gradual path of policy tightening and historically low OCR endpoint this cycle,” Tuffley noted. “This should ensure that mortgage interest rates stay reasonably low over the next few years.”
The survey also suggests that a net of 32% of respondents for the three months ended in May expect higher house prices over the next year. This is a significant increase from just 16% at the start of the year and 17% over the three months to last October.
Tuffley noted that the data clearly shows the “rebound in nationwide and regional house price expectations.”
“But it’s worth remembering that 32% net balance is still well below the +42% this time last year,” he added. “Stretched housing affordability and respondents’ uncertainty over the impact of the government’s new housing policies suggest that we’re actually past the peak for house price increases.”
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