housing confidence survey reveals.
The report showed a net 17% of respondents, in the three months ended in October; expect higher house prices over the next year, compared to 32% last quarter.
Price expectations remain lowest in Auckland, where they are at an eight-year low.
ASB chief economist Nick Tuffley
said the general election has further slowed an already soft housing market.
Tuffley said: “First, loan-to-value ratio restrictions and slightly higher mortgage rates were causing most of the softness.
“But in recent months, uncertainty around the election has seen the market slow even further,” he said.
While Auckland house price expectations are the lowest (9%), the slump in house price expectations were more pronounced in other regions. Expectations in the North Island excluding Auckland fell from a net 43% to a net 23%, report showed.
“We expect house price expectations to remain muted, as respondents are likely to continue anticipating soft market conditions,” Tuffley said.
When it comes to house-buying sentiment, Christchurch bucks the national trend, where more people (a net 1%) think it’s a good, rather than bad, time to buy in that city.
Outside Christchurch, most respondents still see it as a bad time to buy a house. Sentiment is at net -11%, though not quite as negative as in the preceding quarter (-13%).
Tuffley said: “With a number of uncertainties around future housing policy, respondents appear to be remaining cautious.”
The report also showed that most people are still expecting higher interest rates over the next 12 months, but expectations have eased from the highs earlier this year.
“This is likely to represent the fact mortgage rates have settled since the last ASB housing confidence survey,” Tuffley said.
“While we expect the RBNZ to leave the OCR on hold until early 2019, offshore interest rates could see New Zealand mortgage rates creep higher in the meantime.”
Official Cash Rate unchanged at 1.75 percent
Property market bounces back
House price expectations have fallen for the fifth straight quarter to a six-year low, latest