New Zealand housing confidence rose in the three months through January as falling house prices and cheaper borrowing costs revived the appeal of property as an investment.
A net 38% of respondents say now is a good time to buy a house, according to the ASB Housing Confidence Survey. A net 51% expect house prices will fall further in the next 12 months, while 49% see interest rates declining.
“The marked declines in interest rates are having a strong apparent influence on the shift in sentiment,” chief economist Nick Tuffley said in a statement. Still, “the weak state of the economy and mounting job losses will weigh on the market, and the current air of uncertainty is weighing on decision-making.”
New Zealand property values dropped 8.3% in the three months to January from a year earlier , according to QV Valuations. The central bank has embarked on its steepest easing cycle since introducing the official cash rate in 1999 as the economy has stumbled through a prolonged recession.
The ASB survey shows Aucklanders have become most upbeat, with 42% deeming now a good time to buy a house, while 53% see property prices lower by the end of the year. That compares with a rate of 38% in the rest of New Zealand who favour buying property now.
Building permits , excluding apartments, fell a seasonally adjusted 8.2% in January to the lowest level since the series began 17 years ago, according to a Statistics New Zealand report published today.
For the first time since June 1998 the value of non-residential building consents exceeded residential, by $362 million to $329 million.