Photo: RNZ / Nate McKinnon
- House price expectations fell - only net 13% of respondents believed house prices will increase
- A net 20 percent of respondents expect lower interest rates, the highest share since October 2020
- Only a net 8 percent think now is a good time to buy
Confidence in the property market has nose-dived in the latest survey with price expectations dropping.
The ASB Bank's Housing Confidence Survey for the three months to July showed people were not expecting an uptick in prices any time soon.
ASB senior economist Kim Mundy said: "The gloomy sentiment from most Kiwis regarding house price gains is in step with the recent data we've seen showing house prices falling over the past three months.
"We're currently seeing a soft housing market, with plentiful supply, high debt servicing costs and upfront affordability constraints. There's also weakening demand with rising unemployment and easing migration. These combined factors are creating uncertainty and scope for doubt, despite last month's cut to the OCR."
House price expectations fell by a third in the three months to July to net 13 percent compared to 44 percent of respondents expecting a lift last quarter.
"All regions saw a decline in net expectations, with Aucklanders being the least optimistic and South Islanders taking a slightly more glass half-full approach," she said.
The survey also showed a net 20 percent of respondents expected interest rates to fall.
Mundy said it was "somewhat surprising" that despite an expectation interest rates will continue to fall, this was not translating to a view of increasing house prices.
"This might indicate people put more weight into other economic indicators, such as employment rates or migration figures, instead of simply what interest rates are doing. Further interest rate drops may translate into greater confidence in house prices eventually lifting, though we do expect any initial price gains to be marginal."
The survey showed most respondents remain cautious of buying property in the current climate, reflecting the data which show house sales dropping by nearly nine percent this past quarter.
At a regional level, Aucklanders remained the most hopeful, with a net 16 percent thinking now is a good time to buy compared to only net one percent of Cantabrians.
