More think now the time to buy property: ASB

Housing confidence has continued to rise, says the ASB Bank, with 6 in every 10 respondents saying that now is a good time to buy.

The bank's chief economist Nick Tuffley said respondents to its housing confidence survey have become " increasingly enamoured with the housing market" over the past nine months.

Improved sentiment appeared closely linked to the dramatic fall in interest rates over the past year, he said.

But better sentiment does not always translate to better prices, said Tuffley, with a majority of respondents still expecting prices to fall over the next year.

"However, month-to-month results suggest that price views became less negative as the quarter progressed," said Tuffley.

"Housing is a New Zealand example of 'green shoots'. Caution over the outlook for prices and the uncertain economic environment has started to be overcome in recent months", said Tuffley.

"The early months of 2009 have seen positive views on purchasing translate into action: sales turnover lifted sharply through to April. It is likely that the housing market is turning the corner."

But a robust recovery is another matter, said Tuffley. "The main impetus to prices is coming from lower mortgage rates. Many long-run fundamentals for the housing market remain weak, in particular prices remain high relative to both incomes and rents despite recent price falls."

Prospective buyers should be realistic about the extent of future capital gains and to make allowance for the fact that mortgage rates will be, on average, higher than those currently available.


- NZ HERALD STAFF