House price expectations continued to fall over the last quarter while housing confidence remained steady, according to the latest ASB NZ Housing Confidence Survey.
ASB Chief Economist Nick Tuffley said that housing confidence was unchanged during the three months to July, with a net 29% of respondents still saying that now is a good time to buy a house. However this is tempered by a slide in perceptions around house prices.
"Expectations for further rises in house prices have fallen across the regions, with the decline particularly evident in Auckland," he said.
"A net 19% of people we surveyed across New Zealand expected prices to increase, down from a net 35% last quarter. The South Island continues to have the highest price expectation across the regions."
The survey also shows growing awareness across the regions of future interest rate rises, which is likely to be pulling down optimism.
"Almost three quarters of respondents expect interest rates to rise," Tuffley said.
"This result is in line with recent data showing signs of a continued slow down in housing market activity. Nonetheless, house prices remain resilient even though potential sellers appear to be holding off putting their houses on the market. "
He says the median number of days taken to sell a house has continued to edge up and is now above the long-term average.
"We expect the outlook for the housing market will remain subdued given waning housing turnover. Beyond 2010, we forecast weak house price growth, tempered somewhat by population growth and net migration," Tuffley said.