Confidence in residential housing is down, but ASB Bank Economist Rozanna Wozniak thinks it's an over-reaction.
The bank's latest survey of housing intentions, for the three months to January, showed a net 38 per cent of those questioned thought it was a good time to buy a house. That's a sharp fall from 55 per cent the previous quarter and nearly half the peak of 71 per cent a year ago.
Wozniak says the impact of last year's general election, policy-related uncertainty and rising interest rates have been exacerbated by reports of lower real estate turnover and predictions of further rate rises.
However, she says that the positive impact from a strengthening economy, rising employment and greater job security this coming year should largely offset the negatives of rate rises and the growing supply of houses. She also maintains that interest rates should peak well below the levels reached during the mid/late 1990s.
Also in the survey:
- Auckland and Wellington had the largest falls in confidence. In Auckland, net confidence was down from 55 per cent to 31 per cent, real estate turnover was well down and house prices slightly weaker.
- Meanwhile, Wellington continues to have the lowest level of confidence of the regions surveyed. ASB Bank says affordability is the main issue, as prices continued to rise rapidly thanks to a healthy regional economy.
