Fewer people expect house prices to keep rising and more people think it's a bad time to buy a house than think it's a good time to buy, according to ASB's latest Housing Confidence Survey.
The survey, carried out over the three months to April, found that the number of people expecting higher house prices fell to it's lowest level in five years, with 53% of respondents expecting prices to keep rising, down from 56% in the previous quarter.
The biggest drop was in Christchurch, where the number of respondents expecting prices to rise dropped from 44% to 32%.
"Slowing housing activity has seen house price growth ease (or fall slightly) in a number of regions," ASB said in its report on the survey results.
"As a result, ongoing weak housing market activity has continued to weigh on respondents' house price expectations this quarter.
"Interestingly however, the sharpest drop in respondents' expecting house price gains was Christchurch.
"Christchurch's housing market is rebalancing after a surge of supply following the earthquakes, which has resulted in subdued house price growth in the city."
There was also a jump in the number of people expecting interest rates to rise, with 54% expecting them to rise and only 3% expecting them to fall.
It was the first time a majority of the survey's respondents have expected interest rates to rise since October 2014.
Overall, the survey found that a majority of people believe it's a bad time to buy a house, but there were regional differences.
In Auckland slightly fewer people thought it was bad time to buy than in the previous survey, most likely due to the increased number of homes being listed for sale in the region.
But in the rest of the country, the number of people who thought it was a bad time buy, increased.
"While price expectations may have dipped, historically high house prices, higher deposit requirements and expectations for further interest rate increases are likely to be weighing on sentiment," the report said.
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30 Comments
Gordon are you trying to start a Monday morning blue lol
was always going to happen down there, so many left, the influx was made up of mostly tradies who when the work drops off also leave, and a massive building program.
I was looking the other day and the price differential between building in Christchurch and the upper north island (same house) is 30/40%. land is a cost so are wages and materials but that is a big big difference
https://www.generation.co.nz/christchurch-house-land-packages
https://www.generation.co.nz/auckland-south-house-land-packages
https://www.generation.co.nz/tauranga-house-land-packages
I have been told that some builders that used to build in Auckland are no longer available as they have moved out of town because they can no longer afford to buy or build a house there. How can it be possible that materials are more expensive in one area and not the other, price fixing maybe?
Very easy to park and get around for me as I ride a bike. Another reason I like Chch is it's dry and flat, perfect for biking, and loads of new bike lanes springing up around the place. But yes, it seems to be taking too long to get that idea through to people so I think there's a few parking issues for the unreformed (and yes, I accept there's a good 10-20% of the population who would be unable to bike for various reasons). Loads of new shops and businesses opening up in the CBD now regardless, definitely picking up.
Hi Gordon, I moved to Chch precisely because of the cheaper housing. Housing costs are half those of Auckland while wages are only 10% less and there is a great lifestyle to boot. I don't care if house prices go up or down as I am buying to live, not invest. The cost of putting a roof over my head is the key figure.
I would agree with this sentiment, went to a few open homes on the weekend and I was the only person that turned up. Vendors were looking sheepish trying to convince me that their property was good value....
There is a massive gap between vendors hoping to sell their 2014-16 purchase for a 50% markup and what is an affordable mortgage . Its going to be full on panic if May and June also register m/m drops and the y/y rate turns negative.
I've been following the lowest end (up to $300k) of the Wellington market for a while and some of the properties for sale are hilarious. Asking price of $275k, then you check QV and find out the property is rated at $150k and has been bought and sold three times in five years. Haha.
Yeah, I agree. It's pretty sad, but you still have to think critically and do your due diligence, and not buy into the market hype and hysteria.
As a side note, I've found most of the property blurbs/ads for the cheaper properties are all targeting investors and speculators first before owner occupiers and FHBs (and sometimes only them). The ads all talk about "climbing the property ladder," "adding to the portfolio" and "perfect investment," as though houses are nothing more than a widget you buy at an antique fair and sell on TradeMe for twice what you bought it for.
Christchurch is the capital in NZ for opportunity.
There has been far too many new builds from subdivisions opened up and the repair of damaged property.
Christchurch population is still increasing and most people who came in for the rebuild are decidung to stay as it is the most liveable city in NZ with all the new things coming alive.
Prices have stabilised as you would expect due to so much building but this allows people to still be able to buy unlike Auckland, so this is great news.
I know there will be some that tell us that they now everything about the Chch market even though they live in the overpopulated Auckland and that is their perogative.
Each to their own but it is far easier to become financially independent through property in Christchurch than Auckland where you can live off the positive rental returns.
No its far to cold in London and Wales, Auckland is a nice city. Not to mention the traffic is a breeze compared to London. Plus its where my family and friends are, well near pukekohe anyway.
I windsurf, paddleboard and fish, plus get scallops. Auckland area with the coromandels and the quick trip up north rocks.
It all depends on what your base is, but I like all of NZ. Just hoping immigration doesnt change it to much.
you and dan carter could become neighbours, get to watch your favourite team together
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=118…
Auckland remains an excellent prospect for long term property ownership/investment. Demographic projections, alongside NZ becoming an increasingly desired place to live, globally, means Auckland (and Wellington) are very well-placed for the future.
The usual rules of location (including convenience re transport/traffic), flat section, north-facing (sunny), good access (including drive-on) will continue - no matter what part of the property cycle we happen to be in.
I see a lot of people here getting excited by recent evidence of falling prices. Yes - that was foreseeable. Yes - it does create opportunities for buyers (hopefully first home buyers among them).
But, inevitably, there will be a rebound....... With property, the long term trend has always been upward.
So who will buy and how will they buy, do you think it will go from 10-13 times income to 13 - 20 times income? Will banks and government allow that? NZ is a low wage economy so where will the money come from? I wont be buying in NZ if that happens.
Be interesting to see that, and see what happens to New Zealand.
At 6 times annual income it doesn't make any sense to buy property for any reason. Let investors take all the risk and if they put the rent up at least you can still choose to move city or out of country. Financial freedom sometimes means not becoming a 30 year debt slave. Enjoy life off the backs of those investors, because they will take a king hit, not the renter.
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