The number of people expecting interest rates to fall further was at a record high in the third quarter of this year, according to ASB's third quarter (Q3) Housing Confidence Survey.
Of the survey's 2920 respondents, a net 57% expected interest rates to fall, the highest that number has been since the survey began 28 years ago.
However, expectations around house price growth and whether it is a good time to buy were much lower.
A net 24% of respondents thought house prices would rise, up from 13% in the Q2 survey.
Optimism around price increases was particularly strong in Auckland where a net 29% of respondents expected house prices to rise, also up from 13% in the previous quarter.
And a net 20% think now is a good time to buy a house, although the proportion who were undecided about whether it was a good time to buy increased marginally from 47% in Q2 to 48% in Q3.
ASB Senior Economist Kim Mundy said while the data was encouraging and wasn't surprising given the substantial decline in mortgage rates since mid-July, expectations for house price gains were growing at a relatively slow pace.
"Our survey data shows overall confidence levels remain lower than what we observed at the start of the year, which suggests New Zealanders may be concerned about other economic impacts that may hinder house price gains, such as rising unemployment and slowing net migration," Mundy said.
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47 Comments
57% expect interest rates to fall, and 24% expect house prices to rise.
All a survey shows is how many people have their finger on the pulse.
You are misunderstanding net percentage
🥂
Cote d'Azur
Agreed . . . but again, just reflecting the level of understanding of some posters on this site. :)
Try 78.5% expect interest rates to fall, and 62% expect house prices to rise if the choices are binary (remove those who are uncertain).
"...New Zealanders may be concerned about other economic impacts that may hinder house price gains, such as rising unemployment and slowing net migration," Mundy said."
No, out of touch economist, NZers do not spend any time thinking about net migration, just like they don't make inflation forecasts.
I would like to agree with you.
However, a good proportion of existing homeowners in this country believe that mass low-skilled migration and cheap credit pumping up the price of the country's housing stock is actually making them "wealthier". That's why consumer confidence in NZ's economy rises and falls with house prices, i.e., RBNZ's wealth effect experiment.
Very short-sighted vision they have, what's the point of being wealthier in a poorer country?
At some point your money will stop protecting you from the woes of society (crime, collapsing health system, education, etc.).
It's all about being at the top of the pile, not how big the pile is or what it's made of.
You've never spent an evening at local pub to hear the locals complain about "bloody indians" then?
Not saying their take on it is accurate, but they certainly have an opinion about it.
It's OK, the Indians have pretty strong opinions about some of the local kiwis too.
And pretty strong opinions about some of their fellow Indians if how they treat their employees is anything to go by.
I've met a few who say they would never work for one of their 'own'.
now now, let's not stereotype groups of people please.
Nothing wrong with talking about them, stereotypes aren't generally born in a vacuum. I'm sure 5 minutes spent on Google you'd find countless local articles about business owners screwing over their employees, with names from certain ethnic backgrounds featuring prominently. Pretending the problem doesn't exist won't make it disappear.
But we are going off track from the article's topic.
One word. Caste.
That's the result of a policy pitfall though. They should be saying "bloody pollies".
The 3.9 million-strong Indian community has the highest median household income in the US among all migrant groups (100+ included in the group), even higher than American-born population. Indians are disproportionately represented in the high-earning professional category (CEs, doctors, surgeons, engineers, etc.).
Meanwhile, NZ is scraping the bottom of the barrel when it comes to most migrant groups, not just Indians, due to perverse policy settings that favour cheap labour for low-value businesses over higher skilled workers.
Yes. Nothing to do with race, everything to do with quantum, and skillsets
Many NZ Europeans who claim all New Zealanders are equal and Māori have no special status, also recoil at the suggestion that using this logic, they should have no greater say than a recent migrant from India on a resident visa. One day these same individuals will be a minority in New Zealand, and similarly have to bend to the will of people who were once recent migrants. National/ACT are importing their own voters.
You're probably right. Surveys of recent migrants from China found that (in my words) once out from under the thumb of the Chinese Communist Party, Chinese migrants vote for people who let them keep more of their hard-earned cash.
DGM, do you still stand by your call that interest rates are going to rise in NZ ?
Glad that you're feeling happy about a Survey...
How about you answer the question instead of deflecting ?
So DGM, I see you wrote a new post recently "by Dgm | 26th Nov 24, 2:09pm". How about answering the question: "Do you still think NZ interest rates are going up" ? Are you the type to just ignore others when you feel that you were wrong?
The problem is if you want house prices to go down you're dubbed a DGM. There's no benefit for society to have high house prices, people just cut their spendings on cars, leisure, restaurants and more globally everything else.
I do NOT expect rates to rise, but neither do I think real estate will. Careful about the figures, I've noticed less properties on the market in my area, but that's not due to more sales or fewer new listings but to properties being withdraw after 3/6 months on the market.
The 40 year secular bull market in bonds ended in Aug 2020. Since then, 10 year government bonds in countries like the US, UK, Australia, and New Zealand have been selling off, and if you follow the views of Stanley Druckenmiller, Jamie Dimon, and Emmanuel Roman, this trend is expected to continue. Jamie Dimon’s projection of a 7% US 10 year yield would mean fixed-rate mortgages could hit around 9.5% after commercial banks add operational costs (profit margins and credit risk) of approximately 2.5% on top of the swap rate. All it takes is inflation to return, which could be triggered by policies like Trump’s lower income taxes, tariffs, and reduced migrant labour.
I’ve heard a view that ex-USA, Trump’s policies could be deflationary globally, at least in the short term. China might need to dump a whole lot of stuff globally
Japan and China, the biggest holders of US treasuries, have been dumping their holdings, driving bond yields higher. As yields rise, asset prices are likely to face downward pressure, leading to deflation.
Deflation from cheap Chinese goods will cause more pain and headache putting millions of industrial jobs in other economies amid inflated asset bubbles. I reckon European leaders will follow suit in an attempt to protect their sagging industrial sector from further job losses.
Trumps tariff scheme is inflationary to US, and deflationary to China. so the inflation is linked to USD, and all USD linked economies. at the same time, it will be deflationary to CNY, and CNY related economies. so, FED and PBoC will have to act completely opposite to each other.
since NZD is linked more to USD, I'd say we will be 'higher for longer'.
and the reason Chinese dumping US treasuries is not the same as Japan. in the long term, the Chinese is crazy to keep holding large amount US treasuries. look at Russia!
Only fools will be convinced of house price rises in the current environment
Sounds like I'm a fool not a DGM then. Still I got fooled pretty good when house prices just had to take a crash during Covid, I mean lockdowns and people losing their jobs and then interest rates took a dive...........
Isn't that what we are paying for now? During covid things should have gone bad.
Instead we handed out free money and dropped interest rates s everyone felt rich and bought stuff. Driving up prices. So we were all surprised that economic gravity was defeated.
Now.. we are working through the consequences of artificially created a boom on the end of a boom.. to stall the recession that should have happened.
I merely want to point out, house price rises or falls has little to do with how people were convinced at certain point of time.
Only fools will be convinced of interest rate rises in the current environment
Agree. However, emphasis on the word CURRENT.
Things can and do change quickly. Few people predicted the tearaway inflation- and hence steep hikes in interest rates - that occurred from 2021-2023.
Who knows what might happen. The Ukraine war might spread into a wider war, with hyperinflation.
But yes, for now inflation looks defeated and interest rates will be heading south.
I've been hearing landlords complaining about falling rents. House prices go as the yields go.
Not sure where these falling rents are?
We are putting most of ours up in ChCh and tenants are not complaining at all.
There has to be a reasonable rate of return or there will be a bigger shortage of rentals.
Australia are in a far bigger mess than NZ,
Everywhere except your rentals. You are the man! As you constantly have to remind us.
The Third!!!
Said with an Irish accent.
Perhaps everyone is fleeing to Christchurch? Also, landlords often make this argument that if it wasn't for them there'd be a rental shortage. So more homeless I assume? Do you not think landlords are inflating prices forcing more people to have to rent in the first place? Easier on the conscience if you believe the former not the latter. Lastly, who are these tenants that don't complain about rent increases?
You have to understand theman3 is not like other men, he is superior. Superior even to theman1 and theman2 who were already superior to other men.
Rules of supply and demand, national housing trends and negative housing news do not impact him. His tenants pay above average rent and are really happy to because they get to rent from theman3, who wouldn't feel lucky?
Increased house prices means having to borrow more and taking longer to save a bigger deposit. If you cant afford to borrow at current interest rates, how are you going to be able to afford to borrow hundreds of thousands more at slightly lower interest rates?
But... but...... how will the speculators make money....?
By raking in more speculators
Lol.. survey vs reality.. just look at the B&T's auction results for today.. just a shocker
A link for those that are interested ... https://www.barfoot.co.nz/auctions-live/upcoming
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