Conditions are ripe for New Zealand house prices to show modest growth over the next 12 months as supply constraints that have lifted the Auckland market start to show up throughout the country, ASB says.
Housing confidence slipped in the three months ended October 31, according to ASB's quarterly survey. Of those polled, a net 24 per cent said now is a good time to buy a house, largely unchanged from three months ago.
A net 22 per cent expected house prices would increase in the next 12months, down from 25 per cent in July, and 57 per cent said interest rates will rise, up from 46 percent in the previous survey.
We expect modest growth in house prices over the coming year, underpinned by continued tightness in the housing market, said ASB chief economist Nick Tuffley. Recent data show housing market activity continues to pick up gradually.
The survey shows house prices expectations are strongest in Christchurch, where 43 per cent said house prices will increase. Still, those deeming it a good time to buy a house in the quake-ravaged city were minus 6 per cent.
A recovery in underlying housing demand in Christchurch looks to be taking place, Tuffley said.
Aucklanders were also upbeat about the outlook, with 36 per cent seeing higher prices in the year ahead, though the net number deeming it a good time to buy was 23 per cent.
The Auckland housing market has benefitted from a tighter supply of available properties and faster selling times.
There are signs the Auckland housing market has turned in favour of sellers, Tuffley said. We expect other parts of the country will follow suit.
- Hannah Lynch, BusinessDesk
