ASB's latest Housing Confidence Survey features an unusual mix of opinions with a big jump in the number of people expecting interest rates to keep falling, and a big drop in the number expecting house prices to rise.
And people were relatively evenly split on whether or not it's a good time to buy a house.
A net 20% of survey respondents were expecting interest rates to keep declining, up from a net 1% in the last quarter's survey.
That's hardly a surprise - the fall in interest rates has been long anticipated.
ASB's economists said the last time this many respondents were picking interest rate falls was in the third quarter of 2020, when the Reserve Bank was contemplating negative interest rates.
However, only a net 13% of respondents expect house prices to keep rising, a sharp drop from the net 40% that were expecting them to keep rising in the previous quarter's report.
All regions saw a decline in the number of people expecting continuing price increases, although South Islanders were more optimistic about price rises than North Islanders.
"The drop in house price expectations aligns with recent data showing that house prices have been falling for the last three months (seasonally adjusted). This survey is about people‘s expectations in 12 months' time, however, it might reflect the tendency for people to base their opinions on the most recent information," ASB's economists said.
However, just a net 8% of respondents thought it was a good time to buy a home, up modestly from a net 2% in the previous quarter.
That contrasts with the large majority - a net 47% - who thought it was neither a good nor a bad time to buy, down from a net 55% in the previous survey.
"The housing market lost momentum over much of 2024," ASB's economists said.
"Plentiful stock is favouring buyers while relatively high interest rates and slower net migration remain broader headwinds to activity.
"Data from the Real Estate Institute of New Zealand shows that house sales in the three months to July decreased by 8.6% (seasonally adjusted, compared to the preceding three months). House prices declined over the same period."
"We expect sentiment to shift further towards it being a good time to buy as house prices are not likely rebound quickly, while listings remain plentiful, and interest rates are likely to decline further," ASB says.
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