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Housing survey shows cautious optimism

By Christine Nikiel

Friday 24th January 2003

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A "cautious optimism" hovers over this year's housing market, according to ASB Bank's latest Quarterly Housing Confidence Survey.

The survey shows an increasing number of people believe house prices will rise while more people doubt that now is a good time to buy.

Almost 60% of respondents thought house prices would increase, compared with 45% in the September quarter, while 17% thought it was a good time to buy a house, compared with 24% in the September quarter.

Almost 30% of respondents believed interest rates would increase, compared with 58% in the previous quarter.

ASB chief economist Anthony Byett said the strong demand showed supply was still tight.

The "cautious optimism" was a healthy sign for the housing market and showed the upswing in housing was not likely to become excessive and end with a sudden downturn, he said.

"The cautiousness seems to reflect a perception that the balance of power continues to swing in favour of the vendor and also a wider concern about the economy and high levels of household debt," Mr Byett said.

The survey shows Auckland is the best place for house vendors, with 64% of respondents saying they believed house prices in the city would increase.

Auckland's rising average house prices reflect a high number of sales over $500,000, according to Barfoot & Thompson. B&T figures show the average residential house price increased by almost $46,000 last year.

The average price for an Auckland house started at $312,453 in January and ended the year at $358,226.

The average Auckland house price last year was $335,029 compared with $311,165 in 2001.

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