Confidence in Auckland housing market drops
Expectations of house price gains in Auckland fell dramatically this quarter, according to an ASB survey.
Wednesday, January 27th 2016, 9:04AM
by Miriam Bell
ASB chief economist Nick Tuffley
Nationwide expectations of property price gains have dropped in the three months to January 2016, the latest ASB Housing Confidence survey shows.
Forty-four percent of respondents think house prices will go up over the next year, as compared to 52% last quarter.
However, when it came to Auckland, 30% of respondents expect house prices to go up over the year – which is down from 50% last quarter.
These results are likely to stem from the slowdown of Auckland’s market, which has occurred since the government and the Reserve Bank introduced a suite of new tax and LVR measures.
Further, 22% of Auckland respondents think it is a bad time to buy a house, as compared to 25% last quarter.
ASB chief economist Nick Tuffley said high house prices and the tight housing market will continue to weigh on sentiment, as may the additional tax and lending rules.
But while the fall in Auckland house price expectations was not surprising, the decline in price expectations around the rest of the country was surprising, he said.
“Recent trends have indicated that the Reserve Bank’s new lending measures have bought an acceleration in house price growth outside of Auckland.”
On top of that, interest rates have fallen further.
“Yet this survey doesn’t show any strengthening of price expectations beyond Auckland.”
However, it is possible the government’s tax measures, which target investor activity around New Zealand, could also be having an adverse effect on house price expectations outside of Auckland.
Tuffley said that, in Canterbury, the ongoing moderation in price gains expectations is consistent with the region’s market moving to a more balanced position.
Thirty-nine percent of respondents expect Canterbury house prices to go up over the next year.
Meanwhile, fewer people now think interest rates will fall over the coming year.
Twenty-four percent of respondents expect interest rates to get lower, as compared to 35% last quarter.
Tuffley said there was a noticeable increase in respondents expecting interest rates to stay where they are.
“The survey shows 30% of respondents are expecting interest rates to stay the same – as compared to 21% last quarter. This is perhaps because they don’t think they can drop much lower.”
However, ASB expects the RBNZ to cut the OCR by an additional 50bp over 2016, he said.
“So we may see more people expecting lower interest rates as we get further into 2016.”
« Profiles revisited | Free Investment Property Showcase Events: Auckland, Wellington and Christchurch » |
Special Offers
Comments from our readers
No comments yet
Sign In to add your comment
Printable version | Email to a friend |