New Zealanders are expecting both mortgage rates and house prices to rise in the next 12 months.
The latest ASB survey on housing confidence shows people on average think it's neither a good nor a bad time to buy a house.
That's down from a net 8% three months ago thinking it was a good time to buy a house.
A net 56% of people think house prices will rise and a net 39% think interest rates will increase.
ASB economist Jane Turner said the survey results come despite fundamentals, including income and population growth and relatively low interest rates, continuing to support growth in housing demand.
"We do continue to see a decline in the net number of those expecting now to be a good time to buy a house and that decline has come faster in Auckland and Christchurch where the housing market is significantly tighter," she said.
Ms Turner said there are quite a large number of buyers but very few properties are being listed, which takes away a lot of people's negotiating power.
She said house price expectations remain very elevated and there is strong growth in sales prices.
A turnaround has also been noted in interest rate expectations with more people starting to expect that interest rates will increase over the next 12 months.
Ms Turner said that is consistent with the view of ASB, which expects the Reserve Bank to be lifting the Official Cash Rate from March 2014.
