Is property market confidence falling?
A growing number of Kiwis believe it is no longer a good time to buy a house, according to a new report from ASB.
Friday, March 12th 2021, 9:58AM
The bank's latest quarterly Housing Confidence Report indicates that more people are uncertain about the real estate outlook.
A net 8% of respondents now believe it's a bad time to buy a house, a "big fall" from the last quarter, when a net 21% of people believed it was a good time to buy.
The bank's economists, including Nick Tuffley, said: "It’s regarded as a bad time to buy everywhere, but particularly in Auckland where a net 11% of people think it’s a bad time to buy. Cantabrians are the least downbeat, with a net 5% believing it’s a bad time to buy."
Affordability was cited as the biggest reason for the fall in confidence.
New Zealand has become one of the most unaffordable housing markets in the world, according to the bank.
"We’re surprised buyer perceptions haven’t fallen even further given the affordability crunch imposed by soaring house prices and flattish incomes," the team said.
"Average house prices in NZ are now about eight times the average income. In Auckland, the ratio is closer to 10. As we pointed out in our recent housing insights piece, only three out of 92 major global housing markets currently have house price to income ratios north of 10."
The report also noted that confidence about falling mortgage rates was dropping. A net 29% of people expect rates to drop, while a net 17% expect them to rise.
"The general public seems to have recognised that the days of interest rates sliding ever lower are numbered," the report added.
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