Thursday 2nd December 2010
|Text too small?|
Confidence in the housing market continued to fall over the three months to October, with tax changes regarding investment property adding to the cautiousness towards housing as an investment option, according to the latest ASB Housing Confidence Survey.
The survey also found there had been little sign of a rush of listings in the wake of Budget changes in regard to property investment, despite the fact the changes make "investment property a less attractive option."
"It appears potential sellers are holding off putting their house on the market in the hope housing market conditions will improve," said ASB chief economist Nick Tuffley.
Expectations for house price rises fell across all regions, expect Auckland.
The survey found that a net 19% of people expect house prices will increase in Auckland compared to a net 4% for the rest of the North Island. The figure is just 2% for the South Island.
Overall 33% expect to see higher prices against 38% last quarter, with 25% expecting lower prices, up from 19% last quarter. The number expecting no change remained stable at 37% against 38% in the previous quarter.
When it comes to buyer confidence the survey found a slight fall in optimism across the regions, with 41% saying now was a good time to buy against 39% in the last quarter, while 13% believe now is a bad time to buy against 9%.
Tuffley said fewer people expect to see interest rates rise but this is not fuelling housing confidence.
A net 65% expect to see rates increase against 74% in the previous quarter, while 5% expect to see lower interest rates.
"This subdued interest increase expectation would usually fuel housing confidence, but it is balanced out by the fall in price expectations."
Despite the dearth of new listings, the survey found housing inventory had increased, a sign of the low level of sales in a market that "remains tipped in favour of buyers."
Looking beyond early 2011 house prices are expected to track broadly in line with inflation around 2-3% per annum, and a number of constraining factors are highlighted.
"The announcement in the May Budget of the removal of the ability to claim depreciation will reduce rental investment demand. In addition, mortgage rates are expected to gradually rise over the year."
No comments yet
Skellerup projects 2017 profit to rise as much as 7%, heightens focus on water and food safety
Pumpkin Patch tipped into receivership, appoints adminstrators
Landcorp Farming forecasts wider annual loss, no dividend
Restaurant Brands agrees to pay US$105M for Hawaiian fast-food chain
NZ gets thumbs up on tax as it tops World Bank ease of doing business report
Serko narrows first-half loss, says it won't need more capital to reach 2018 profitability target
NZX head of markets Mark Peterson to act as interim chief when CEO Bennett leaves
NZ dollar dips vs. Australian dollar as higher iron ore prices bolster Aussie
While you were sleeping: Earnings disappoint
UPDATE: NZME considering A$156M purchase of local Adshel business