Confidence in the housing market remains stable despite much of the current negative comment, according to the latest property survey. However the expectations around where house prices will go vary markedly across the country.
The latest ASB housing confidence survey shows that, a net 29% of respondents believe now is a good time to buy a house, which is unchanged from the previous survey.
However the big change within this number is that the net proportion of respondents who consider now is a good time to buy in Auckland increased, and the proportion in the South Island fell.
"The survey results are quite resilient compared to the subdued activity in the market," ASB chief economist Nick Tuffley says. "Feedback is not what I would call bad at all."
Expectations for price remain positive, although fewer people are expecting price increases.
The survey shows 19% of respondents are expecting house prices to increase over the next 12 months, compared to 35% the previous quarter.
Despite the fall, Tuffley says price expectations are around the historical average and given the weak market, confidence has held up well.
Disparity over price expectations was evident in the regions, with Auckland seeing a net 20% of respondents believing prices will rise, compared to 38% the previous quarter. The North Island outside of Auckland saw a net 16% expecting prices to increase compared to 30% previously, while the South Island showed the most optimism, with a net 24% expecting house price increases, compared to 41% previously.
Tuffley says although it is a challenge to determine why price expectations vary in different parts of the country, he says Auckland's dramatic fall in price expectation may be due to a catch-up, after being more resilient than the rest of the country until now.
He says Auckland tends to be more "manic-depressive" than other parts of the country and that the latest results could be a switch to a more circumspect attitude.
"The euphoria of last year when the housing market bounced out of recession is starting to wear off."
Rising interest rates are also having an affect on market sentiment, with a net 71% believing interest rates will increase, compared to 59% the previous quarter.