Pessimism is on the rise in ASB’s latest Housing Confidence Survey, with more people believing it’s a bad time to buy a house than think it’s a good time to buy, especially in Auckland.
ASB’s latest quarterly survey showed that nationwide, 13% of people thought it was good time to buy a house while 21% said it was a bad time to buy, giving a net 8% who think it’s a bad time to buy. Of the remainder, 49% said it was neither good nor bad and 17% didn’t know.
And the mood has become more pessimistic since the last survey, when a net 6% of respondents thought it was a bad time to buy a house.
However, the pessimists are much more dominant in Auckland and Canterbury than in the rest of the country, the survey found.
In Auckland, a net 19% of respondents thought now was a bad time to buy a house, compared with a net 15% who were pessimistic in the last survey, while in Canterbury a net 16% thought it was a bad time to buy, unchanged since the last survey.
The pessimism evident in Auckland contrasts with sentiment in the rest of the North Island where the optimists narrowly outnumber the pessimists, with a net 1% believing it’s a good time to buy.
But in the rest of the South Island apart from Canterbury the overall mood was pessimistic, with a net 3% of respond nets believing it’s a bad time to buy.
The survey also found that a net 56% of respondents believe that house prices will increase in the next 12 months, which was down from 59% in the last survey.
Respondents were most bullish about the prospects for house prices in Auckland, where a net 63% expected them to rise in the next 12 months.
“The results don’t point to house price growth intensifying over the next year, but still suggest a decent pace of growth in the near term. It remains a tight market that is difficult for buyers,” ASB chief economist Nick Tuffley said.
There was also a big drop in the number of people who believe interest rates will rise in the next 12 months, which declined from 34% in the previous survey to 11% in the current one.
A year ago, a net 70% of respondents thought interest rates would rise in the following 12 months.
Tuffley said much of the recent discussion about a housing bubble had been focused on Auckland , where prices were the most stretched.
“The Auckland market makes up around 39% of national sales. Add in the Canterbury market, which is still fairly tight, and we are talking about more than half of the housing market, based on latest turnover,” he said.
“Accordingly, it’s hard to dismiss the housing issues as just an Auckland problem.”
The combination of strong migration inflows, low interest rates and the confidence shown by respondents in the survey, was supportive of robust demand and price gains in the months ahead, ASB said in its commentary on the survey results.
To read the full survey results. click on the following link:
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