ASB survey shows more people are expecting interest rates to fall but they remain uncertain about prices and whether it's a good time to buy
By Greg Ninness
ASB's latest Housing Confidence Survey shows there's has been a turning of sentiment, although there is still considerable uncertainty in the market.
According to the Survey, taken over the three months to the end of April, more New Zealanders were expecting interest rates to fall over the next 12 months than were expecting them to keep rising, as confidence grows that the Official Cash Rate has reached its peak.
However it also showed that although interest rate expectations had turned, conflicting factors and a cloudy economic outlook meant respondents were uncertain about the future of house prices and whether it was a good time to buy or not.
A net 1% of respondents said they thought interest rates would decrease in the coming 12 months, however that did not appear to have translated into purchasing confidence, with just a net 2% of respondents saying it was good time to buy and more than half saying it was neither a good time nor a bad time.
ASB Senior Economist Kim Mundy said the survey reflected a complex market picture.
"There are a lot of conflicting factors playing out in the market at the moment," he said.
"While we are at the peak of the interest rate cycle, there is still uncertainty about when the Reserve Bank will begin lowering the Official Cash Rate [currently 5.50%], which means affordability constraints are likely to remain."
"House price forecasts are being revised down as the market has been slower to lift than expected - ASB recently lowered its price growth forecast to about 1% year-on-year for 2024."
"Add to this an increase in new listings pushing supply to 10 year highs and a flat economic outlook and it is a complicated picture," Mundy said.
ASB is New Zealand's second biggest housing lender, with exposure of $73.815 billion as of March 31.
This story was originally published on Interest.co.nz and has been republished here with permission.
