20 Feb 2017

Fewer people expect house prices to rise - survey

5:55 am on 20 February 2017

There are further signs the housing market is cooling off, with fewer people expecting prices to rise in the coming months.

An auction sign outside a house for sale in Auckland.

Overall, survey respondents believed now was a bad time to buy a house. Photo: RNZ / Claire Eastham-Farrelly

The ASB Bank's latest Housing Confidence Survey shows a net 46 percent think prices will climb, compared with 58 percent in the previous survey.

Data from the latest Housing Confidence Survey shows less than half of New Zealanders expect prices to climb.

Data from the latest Housing Confidence Survey shows less than half of New Zealanders expect prices to climb. Photo: Supplied

ASB chief economist Nick Tuffley said the survey followed a significant drop in housing market activity after the introduction of tougher lending measures last year.

"Not only has housing market data shown a fall in sales activity recently, it has also suggested house price growth has slowed in a number of regions," he said.

Mr Tuffley said overall respondents believed now was a bad time to buy a house.

"Elevated house prices are likely to still be weighing on sentiment, as are the higher deposit requirements now facing investors in particular," he said.

Mr Tuffley said more people expected mortgage interest rates to rise further.

"While we expect the RBNZ to leave the OCR on hold until late 2018, funding pressures and higher offshore interest rates could see mortgage rates creep higher," he added.

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Photo: ASB

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