New listings of houses available for sale rose in August but are still insufficient to meet demand, pushing the inventory of available properties to a record low.
The more than 10,700 new listings in August recorded on the www.realestate.co.nz website, which accounts for more than 95% of all new listings in New Zealand, were up 9% from July and up 3% on August last year.
Despite that, the number of houses available for sale fell to just 23 weeks worth of sales, down 24% on August last year and well below the long-term average of 38 weeks.
ASB Bank economist Jane Turner said the housing market remained exceptionally tight, particularly in Auckland.
"While there was a pick-up in nationwide new listings, in Auckland there wasn't so much of a pickup, demand remains very firm and the available number of listings continue to decline," Ms Turner said.
"As a result, that market is going to remain very tight and we do continue to expect house price growth in Auckland."
However, it was encouraging that there was a pickup in Christchurch listings, as a result of the Canterbury rebuild, she said.
"We do expect to see some alleviation of the housing market pressures there but it will take some time."
The Reserve Bank was hoping its policy restricting bank mortgage lending to people with deposits of less than 20% to no more than 10% of total mortgage lending from 1 October would lead to some slowing in demand for housing and credit, Ms Turner said. However, the ASB Bank did not believe that would be the case.
"It will have a modest impact but mostly we expect many people who it affects could find ways around it."
The housing market was expected to remain firm, with the underlying factors of supply constraints in Auckland and Christchurch being a long way from being resolved, she said.
Moves unpopular
Meanwhile, a survey by Bank of New Zealand chief economist Tony Alexander suggests efforts to suppress the strong housing market may not be popular.
His survey of 582 businesses found a net 11% are happy to see house prices rising.
"What this means, with a net 11% of people quite happy that prices are rising, it means that maybe the constituency in favour of restrictions on New Zealand's housing market, something like capital gain tax etc, is not necessarily as large as some of the politicians and commentators might think," Mr Alexander said.
"It's politically correct for people to say 'oh no, I don't like that house prices are rising quite quickly' but when asked honestly, most people are saying 'yep, I am quite happy about these prices rising'.
The survey also found Fonterra's botulism scare appeared to have dented New Zealand businesses' confidence about the nation's economic relationship with China.
Those feeling relaxed about the relationship had dropped to a net 28% in August compared with the steady 44% results recorded in May, June and July.
But Mr Alexander said it was inevitable China would become more and more important to the New Zealand economy.
