Professional Documents
Culture Documents
Heating up
• Housing market constrained by decline in available listings, but demand/supply balance will adjust.
Housing confidence remained strong in the three months to October, according to the ASB Housing Confidence
Survey. Notably, the survey has seen a marked shift in house price expectations. In the three months to April a
net 45% of respondents expected house prices would fall over the following 12 months: in the latest survey a net
40% expect house prices to rise. The turnaround is the largest recorded in the survey to date.
In keeping with the bullish sentiment towards housing, the market itself has swung firmly back to being a sellers’
market. Time taken to sell is falling and prices are increasing as buyers compete to snaffle up houses. However,
the level of turnover has stalled at below-average levels. The market is showing strong signs of being constrained
by a lack of available stock for sale. The imbalance is likely to gradually correct over the next year as demand
moderates through higher interest rates and renewed emigration, and as supply starts to respond.
Confidence The ASB Housing Confidence survey suggests growing interest in housing:
13 Nov. 09
continues to • A net 40% of respondents expect house prices to increase in the next twelve months;
lift
• A net 48% of respondents believe now is a good time to buy;
• A net 35% of respondents expect interest rates to rise in the next twelve months.
Sentiment towards home purchasing has been very buoyant over the past year, and price
expectations have turned up dramatically over the past 6 months.
Price Price expectations firmed substantially over the N et% PRICE EXPECTATIONS
expectations past 3 months. The monthly breakdown of the 80% 80%
jump N e t % e xpe c t ing
previous survey had indicated a move into net
ho us e pric e s t o inc re a s e
positive territory was underway from July. Over 60% 60%
the past quarter price expectations have
40% 40%
approached the levels reached during the 2002-03
and 2007 periods of extreme exuberance.
20% 20%
Expectations are now consistent with a return to
double-digit annual price growth. 0% 0%
A breakdown of the net quarterly figure is:
• 53% expect higher prices (27% last quarter),
-20% -20%
2
NZ Housing Confidence
13 November 2009
…by a relatively low A glut of listings built up as the housing mo nths. mo nths
MONTHS OF INVENTORY
level of property market slowed over 2007 and 2008.
listings But the rebound in sales earlier this 20 20
year quickly whittled down the NZ: invento ry at current sales rate 18
overhang. But, once inventory levels
A uckland : invento ry at current sales rate 16
reduced substantially, sales also 15
levelled off. 14
12
The market not quite as tight as it was
during the peak of the boom. But there 10 10
3
NZ Housing Confidence
13 November 2009
For more …
ASB commentary on Commentary on the housing market and on home loan rates go to the following online
housing and home ASB reports:
loan rates. • Housing Confidence (this report)
• Home Loan Rates
• Weekly Economic Reports.
For general reference, the reports are included within the online Information Centre
(https://reports.asb.co.nz/index.html).
For specific reference to housing, reports that include housing commentary can be
accessed via a Search page (https://reports.asb.co.nz/search/keyword.html) by selecting
the keyword “Housing”.
https://reports.asb.co.nz/index.html http://www.research.comsec.com.au
ASB ECONOMICS
Level 9, 135 Albert Street, Auckland
Economics
Chief Economist Nick Tuffley nick.tuffley@asb.co.nz (649) 374 8604 (649) 302 0992
Economist Jane Turner jane.turner@asb.co.nz (649) 374 8185
CBA NZ Economist Chris Tennent-Brown chris.tennent-brown@asb.co.nz (649) 374 8819
DISCLAIMER
Views expressed in this report are those of the authors as at the date of this report and are based on information and sources believed but not
warranted to be correct. Any views or information, while given in good faith, do not necessarily reflect the views of ASB and are subject to
change without notice. Neither ASB Bank Limited nor any person involved in preparing this report accepts any liability for any loss or damage
whatsoever that may directly or indirectly result from any views, information or omission contained in this report.
4