Slight increase in the number of people who think it is a good time to buy a house

Property

ASB's latest Housing Confidence Survey shows less than a quarter of people think it's a good time to buy a house

26th Aug 19, 5:00am by Greg Ninness

There has been a slight increase in the number of people who think it is a good time to buy a house, according to ASB's Housing Confidence Survey.

In a survey carried out over the three months to the end of July with 2825 respondents, 23% thought it was a good time to buy a house, up from 19% in the three months from February to April.

Conversely 15% thought it was a bad time to buy, which was unchanged from the previous three months.

But the biggest group were those who didn't have strong feelings one way or the other, with 47% saying it was neither a good nor bad time to buy, down from 51%. The 15% who simply didn't know was unchanged from the previous three months.

So the only movement was a small shift in the number of people who moved from thinking it was neither a good nor bad time to buy to thinking it was a good time to buy.

There were bigger movements in the numbers who thought interest rates would go up or down.

The number who thought interest rates would rise dropped from 23% in the three months to April, to 17% in the three months to July, while those who thought they would fall increased from 13% to 27% over the same period.

The biggest group (30%) were those who thought interest rates would remain the same, down from 36%, while 26% didn't know (previously 28%).

The survey was completed shortly before the Reserve Bank made a surprisingly 50 basis points cut to the Official Cash Rate in early August and the housing market has largely been in the doldrums over winter.

ASB's next survey, which will be carried out over the three months to October, is likely to be more telling, because it will capture the mood post the OCR cut and people will have an idea of how much the housing market will have moved over spring, which is usually a busier time of year for the real estate industry.

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31 Comments

by mikekirk29 | 26th Aug 19, 9:01am 1566766899

A breakdown by age would be instructive?
"Buy a house" is awfully vague. A first house and aged 27-35 would be more reflective of optimism?
And then broken down into Auckland and other?
This seems a v common error by researchers. Too generic

by Voiceofreason | 26th Aug 19, 9:33am 1566768823

Definitely slowing property market: Metlifecare net profit falls 68% as property revaluations rise at slower rate
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12…

by tothepoint - d… | 26th Aug 19, 9:43am 1566769389

The various indicators are progressively pointing to a firming of the housing market over the next 12 months or so.

TTP

by CourtJester | 26th Aug 19, 9:56am 1566770183

Which indicators?

by BadRobot | 26th Aug 19, 10:15am 1566771340

Yes Pointy which indicators.

by RickStrauss | 26th Aug 19, 2:21pm 1566786109

Intangible ones, apparently.

by CourtJester | 26th Aug 19, 2:42pm 1566787374

"Straws in the wind" - as per Westpac.

by Pragmatist | 26th Aug 19, 6:25pm 1566800759

frog entrails and bat poo?

by Voiceofreason | 26th Aug 19, 10:02am 1566770538

You mean the indicator that is the RBNZ slashing the OCR by an unexpected amount to try and prop up the market?

by am_fek | 26th Aug 19, 10:22am 1566771737

RBNZ helpfully gives its reasoning behind every MPC decision. Propping up the housing market is not the reason. Not sure why people are so flippant about it. What other conspiracy theories are popular around here?

by Voiceofreason | 26th Aug 19, 10:34am 1566772482

From August 2019: “The Reserve Bank has slashed its house price projections for the rest of this year and is clearly baffled as to why actual prices have turned out so much weaker than it expected.”
https://www.interest.co.nz/property/101097/its-latest-monetary-policy-s…

by HeavyG | 26th Aug 19, 10:44am 1566773067

That statement doesn't indicate weaker than expected house prices is the reason the RBNZ dropped the OCR. If inflation was running above 3% and the OCR was cut in the face of weak house prices you might have a good conspiracy theory. That's not the case.

by Voiceofreason | 26th Aug 19, 12:56pm 1566780994

What they are required to do is keep inflation in the satisfactory zone (in this case make it higher than it is) and help keep unemployment as low as possible. It’s not conspiracy to put two and two together to realise that if the property market continues to decline it will severely impact the economy and therefore unemployment (especially the large construction industry), so they would not want that to happen. Hence their concern about to market being surprisingly weak. In any case, I’m not saying it’s the only reason for the rate cuts, but surely a big factor. Same with the RBA in Australia. The construction industry is a big employer in both countries.

by J.C. | 26th Aug 19, 3:53pm 1566791590

Nicely expressed. IMHO (of which I don't necessarily think I'm right), asset deflation is a major threat to the NZ economy, particularly consumer spending. As seen globally, less consumer spending further negatively impacts consumer spending creating a perpetual downward spiral. The RBNZ will be aware of what I'm saying and should be considering it an important issue of concern.

by SmoKey | 26th Aug 19, 1:01pm 1566781264

Must be not less than 50%.

by CN | 26th Aug 19, 1:29pm 1566782962

FYI, https://www.corelogic.co.nz/sites/default/files/2019-08/CL19_Q2_NZ%20Pa…

by CN | 26th Aug 19, 1:30pm 1566783032

About 90 per cent of all Auckland property sales are now resulting in a profit for the seller – a level not seen for six years.
CoreLogic has released its latest Pain and Gain report, which shows that nationwide, 95.6 per cent of sales were for more than the seller had originally paid for the property.
That is down on 96.4 per cent the previous quarter.
But in Auckland, 91 per cent were for a profit, compared to 95 per cent a year earlier.

by Yvil | 26th Aug 19, 2:19pm 1566785961

Great post, so the number of people on-selling their house for a profit is down…. to 95% NZ wide and 91% in Auckland.
DGM, "see it's going down"
Reasonable person "It's amazing that over 90% sell at a profit"

by Houseworks | 26th Aug 19, 2:36pm 1566786992

Almost guaranteed profit as well as a home for the period of ownership. And without the constant sometimes daily gyrations.

by CourtJester | 26th Aug 19, 2:45pm 1566787527

Is it so difficult to understand that the people you call DGMs aren't arguing the fact that buying a property many years ago was a good idea? What these so called 'DGMs' are saying is that prices aren't going to go up in the next few years, and in fact are likely to go down.

by J.C. | 26th Aug 19, 3:04pm 1566788646

Is it so difficult to understand that the people you call DGMs aren't arguing the fact that buying a property many years ago was a good idea?

Right, but buying anything in an everything bubble is a good idea, as long as it doesn't bite you on the ass. The only things that the mainstream weren't buying in the everything bubble was gold, silver, and the associated miners.

by Houseworks | 26th Aug 19, 4:14pm 1566792851

Only a fool would not aim to own his own home. Even a snail is smarter than you are jester.

by gingerninja | 26th Aug 19, 5:21pm 1566796910

NO ONE HAS SAID THEY DON'T WANT TO OWN A HOME..... people are timing the market, not denying the long term benefits of home ownership

by Houseworks | 26th Aug 19, 6:01pm 1566799308

Are you in a Wellington gale right now gingerninja, hows the renovations?

by CourtJester | 26th Aug 19, 7:21pm 1566804111

Argumentum ad hominem. Why the personal attack? Why not argue with the thing I pointed out instead?

by CN | 26th Aug 19, 1:31pm 1566783103

About 10 per cent of all Auckland property sales are now resulting in a loss for the seller – a level not seen for six years.
CoreLogic has released its latest Pain and Gain report, which shows that nationwide, 4.4 per cent of sales were for less than the seller had originally paid for the property.
That is up on 3.6 per cent the previous quarter.
But in Auckland, 9 per cent were for a loss, compared to 5 per cent a year earlier.

https://www.stuff.co.nz/business/115226109/proportion-of-auckland-prope…

by Yvil | 26th Aug 19, 2:22pm 1566786139

Thanks CN, who wouldn't want to invest their money with odds of over 90% of making a profit, it's just outstanding, truely stellar, all the while enjoying living in your "investment" absolutely unbeatable

by J.C. | 26th Aug 19, 3:05pm 1566788742

True. You can't live in equities, cash, or precious metals.

by GGP | 26th Aug 19, 3:14pm 1566789287

Does the 90% figure take into account inflation, costs of ownership, and costs of actually selling?

by Pragmatist | 26th Aug 19, 4:56pm 1566795409

Pretty sure its just the selling prices they look at.

by GGP | 26th Aug 19, 5:23pm 1566797022

Which, if that's true, "90% chance of making a profit" is not very accurate. I'm guessing it's still high, but not that high.