Photo: RNZ / Nate McKinnon
Confidence in the housing market is perking up, with more people believing house prices are now past their lows and are set to increase, according to a new ASB survey.
The bank's just-released housing confidence survey shows 8 percent of the 2900 respondents expected house prices to fall further, down from 34 percent the previous quarter.
ASB economist Nathaniel Keall said the result tracked with recent data showing house prices were stabilising.
"We're expecting the market to slowly continue warming up," he said.
"The length of time taken to sell properties may be decreasing, but the cycle is a lot slower than what we have seen in 2020 and 2021.
"While the market has turned, it's going to take some time to get back to where it was."
All regions saw an increase in price expectations but Auckland was the most confident, with respondents no longer expecting further house price falls on a net basis.
"This isn't surprising given we have seen prices in the region continue to outperform the rest of the country in recent months," Keall said.
"Since the market low in the first quarter of the year, Auckland house prices are up 2.8 percent - more than the national average."
Aucklanders were also the most optimistic about the market, with net 12 percent saying it was a good time to buy, compared with net 6 percent across the country, up from just 1 percent on the previous quarter.
The South Island was more negative with net 3 percent saying it was still a bad time to buy.
Keall said prospective buyers and sellers were navigating a tricky environment.
"On one hand, the market is no longer declining, so the risk of overpaying for an asset that will fall in value is lower than it was, but interest rates remain high, which means that debt servicing will continue to be a real challenge for many."
A net 38 percent of respondents expected further interest rate hikes, down from a net 59 percent last quarter, and a net 78 percent two quarters ago.
Keall said the result was unsurprising given the Reserve Bank's decision to opt out of increasing the Official Cash Rate at its previous three meetings, although some economists were not ruling out another hike before Christmas.
"We tend to agree the smart thing for prospective borrowers to do is to budget on rates remaining where they are, at least for the next 12 to 18 months," he said.
