There has been a sharp turnaround in housing confidence with a big majority of people thinking house prices will keep rising, according to ASB's latest Housing Confidence Survey.
Done over the three months to the end of October, the survey found 57% of respondents from across New Zealand expect house prices to keep increasing, while just 12% expect them to decrease. This is a reversal from the previous three months (to the end of July) when more people expected prices to fall than to rise.
The October figures were the highest expectation of house price rises in the survey's 24 year history.
Expectations of price rises were weakest in Auckland and strongest in the rest of the North Island, but a big majority of respondents in all parts of the country expected prices to keep rising.
However the survey found almost no change in people's overall interest rate expectations, with 40% of respondents expecting them to fall further, 32% expecting them to stay the same, 11% expecting them to rise and 18% who didn't know one way or the other.
Expectations of price rises seem to have had a bigger impact on people's perceptions of whether it's a good time to buy than their expectations around around interest rates.
Across the entire country, 26% of respondents thought it was a good time to buy a house, 14% thought it was a bad time, 47% thought it was neither a good nor bad time, and 13% didn't know one way or the other.
Overall, that meant sentiment was sightly more positive than negative, but it was less positive than it was in the previous three months.
"We suspect affordability is the issue," ASB's report on the survey results said.
"We tend to observe a pretty strong inverse relationship between the level of house price inflation and perceptions of whether it's a good time to buy."
The comment stream on this story is now closed.