A new report shows that mortgage lending restrictions are denting housing confidence.
The ASB Housing Confidence Survey for the three months to October shows a net 56% of respondents expect prices to rise over the next 12 months, unchanged from the previous survey.
However, the results show a slight dip in house price expectations in October, since the Reserve Bank's high loan-to-value lending restrictions took effect.
ASB chief economist Nick Tuffley says while overall price expectations remain high, the new lending rules are affecting sentiment with more people thinking now is a bad time to buy.
He says the deteriorating sentiment is more dramatic in Auckland than the rest of the country.
Mr Tuffley says expectations that interest rates will rise from next March are also hurting confidence.
He thinks the next survey will provide a better reflection of the impact of the lending rules.