More than half of people expect house prices to continue to rise over the next year, a new survey shows.
The ASB Housing Confidence Survey reports that a net 56% of respondents expected prices to rise over the next 12 months.
ASB chief economist Nick Tuffley said: “Fundamentals, such as income and population growth and relatively low interest rates, will continue to support housing demand over the coming year.”
House price expectations edged slightly lower in the three months to July, but that seemed to be influenced by a change in survey methodology. he said, “Net price expectations remain highest in Canterbury and Auckland, where the housing market remains tightest and house prices are rising rapidly.”
But the tight housing market meant fewer respondents thought now was a good time to buy. A net 0% of respondents believe now is a good time to buy, compared to a net 8% in the three months to April.
Tuffley said the results reflected the current housing landscape, “While housing demand has increased, new supply has remained at historically-low levels. With more potential buyers chasing the few properties listed, competition has bid up prices and reduced negotiating power.”
Interest rate expectations lifted in the three months to July, with net 39% of respondents expecting interest rates to rise over the next 12 months.
“This is consistent with our view the RBNZ will start to lift the OCR from March 2014. Some fixed-term mortgage rates have started to increase to reflect the likelihood of a higher floating rate in the future,” Tuffley said.