ASB says the public's confidence in the housing market has finally cracked

By Greg Ninness

The public's confidence in the housing market has finally cracked, according to ASB's latest Housing Confidence Survey.

"The percentage of kiwis expecting house prices to keep rising over the next 12 months has plummeted from a net 11% expecting them to increase last quarter, to a net 31% expecting them to decrease in the three months to July," ASB says.

A net 31% means 31% more people expect prices to fall than expect them to rise.

That's the lowest level of confidence in the housing market for 13 years, ASB said in its report on the survey's results.

"We've previously marvelled at just how resilient the public's house price expectations have been over the past few years," the report said.

"Despite all manner of housing health warnings and policy changes, kiwis remained steadfast in their belief that house prices would keep rising. Until now.

"It seems to be a case of seeing is believing. With the housing downturn now plain to see and house prices around 8% off their peaks, confidence is finally crumbling," ASB says.

"We suspect it will remain in the doldrums for some time if our housing view proves anywhere near correct. We continue to expect a 12% peak-to-trough decline in house prices, with the downturn extending to around mid-2023," the report said.

Not surprisingly, rising mortgage interest rates appear to be driving much of the decline in housing sentiment, with a net 81% of the survey's respondents expecting interest rates to keep rising over the next 12 months.

This story was originally published on Interest.co.nz and has been republished here with permission.