House buyers see glimmer of hope as prices fall

The ASB Bank has released its housing confidence survey for July, and this suggests "a greater proportion of people see now as a good time to buy". The "good time to buy" opinion rose from -9% in the three months to April, to +9% in the three months to July. But this same survey showed even more clearly that New Zealanders expect prices to keep falling. An overwhelming 56% of respondents expected prices to fall from here, the weakest reading in this survey by a substantial margin. The survey began in 1996. 64% expect lower prices, while only 8% thought prices would rise, and the difference between these two gives the net index reading.The Bank says the decline in interest rates "will help to gradually bring some stability back into the housing market, but prices are likely to remain subdued in most regions for a couple of years." "House prices remain high relative to incomes, and there appear to be few magic bullets in the wings that will change this. That aside, there is a glimmer of hope on the horizon, with some easing of pressure on household finances likely to come over the next year through lower interest rates and tax cuts." �