Housing confidence back to 2020 levels - survey

By Nona Pelletier of RNZ

• The ASB Housing Confidence Survey shows a net 33% expect house prices to rise.
• A net 23% believe it’s a good time to buy, with interest rates expected to fall.
• Canterbury’s confidence increased, but overall caution remains due to high home inventory and market conditions.

The number of New Zealanders expecting house prices to rise has returned to 2020 confidence levels.

ASB’s latest Housing Confidence Survey for the three months that ended in December found a net 33% of respondents thought house prices would rise and a net 23% thought it was a good time to buy a house.

However, there was a slight drop in the proportion of people expecting interest rates to fall to a net 51% from a net 57%, though the survey predated the Reserve Bank’s (RBNZ) most recent cut of the Official Cash Rate to 3.75%.

ASB chief economist Nick Tuffley said the results aligned with expectations for a slower pace of OCR cuts for the rest of 2025.

“Inflation is back under control, and the RBNZ has already cut the OCR considerably,” he said.

“For those considering buying a home, there is a bit of a sweet spot at the moment with interest rates continuing to fall, high levels of supply, and subdued house prices.”

Canterbury’s confidence rose the most with a net 38% thinking prices would rise, from 25% in the third quarter.

However, there was less confidence when it came to buying.

A net 23% of overall respondents thought it was a good time to buy, compared with 20% in the third quarter, though confidence wavered in Auckland.

“There still seems to be a little bit of caution in reality, and we would expect to see that caution will start to get thrown over to the wind as the year progresses,” Tuffley said.

“Where we are now is pretty much on par with the optimism that we saw late 2020 early 2021, when we had the big boom in the housing market.

“Certainly we’re back to feeling as optimistic about it being a good time to buy as we were when we came out of that first lockdown back in 2020.”

However, Tuffley said the glut of houses for sale could be a reason why would-be buyers were taking their time. The high number is reflected in the latest data from the Real Estate Institute, which showed a surge in new inventory of homes on the market, while sales continued to decline.

“There may also be some concern about the inflationary impacts of [Donald] Trump’s re-election in the United States,” Tuffley said.