People are becoming more gloomy about property as price expectations hit a six-year low and interest rates are expected to rise.
The ASB Housing Confidence Survey out today showed many of the 2777 respondents expected interest rates to go up and price expectations remain lowest in Auckland.
House price expectations have fallen for the fifth straight quarter to a six-year low, the survey reveals.
A net 17 per cent of respondents (for the three months to October) expect higher house prices over the next year, compared to 32 per cent last quarter.
Price expectations in Auckland are at an eight-year low.
The survey results were released after Parliament opened yesterday. Governor-General Dame Patsy Reddy delivered the "speech from the throne", setting out Jacinda Ardern's new Government priorities for the coming three-year term.
Its KiwiBuild programme would build affordable homes rapidly, foreign speculators will be banned from buying existing homes, and the "bright line" test will be extended to property within five years, the speech said.
ASB chief economist Nick Tuffley blamed the election for further slowing an already soft housing market.
"First, loan-to-value ratio restrictions and slightly higher mortgage rates were causing most of the softness. But in recent months, uncertainty around the election has seen the market slow even further," Tuffley said.
Falls in house price expectations were more pronounced outside Auckland.
Expectations for higher prices in the North Island excluding Auckland fell from a net 43 per cent to a net 23 per cent.
"We expect house price expectations to remain muted, as respondents are likely to continue anticipating soft market conditions," Tuffley said.
Pessimism over whether now was a good or bad time to buy still reigned. When it comes to house-buying sentiment, Christchurch bucked the national trend, where more people (a net 1 per cent) thought it was a good, rather than bad, time to buy in that city, the survey found.
The combination of plenty of housing supply and falling house prices, from already affordable levels, appeared to be boosting sentiment in the Christchurch market, Tuffley said.
Outside Christchurch, most respondents still see it as a bad time to buy a house.
"With a number of uncertainties around future housing policy, respondents appear to be remaining cautious," Tuffley said.
Most people were still expecting higher interest rates during the next 12 months, but expectations had eased from the highs earlier this year, he said.
"This is likely to represent the fact mortgage rates have settled (if not fallen slightly) since the last ASB Housing Confidence Survey," Tuffley said.
"While we expect the RBNZ to leave the OCR on hold until early 2019, offshore interest rates could see New Zealand mortgage rates creep higher in the meantime," he said.
Meanwhile, according the latest Trade Me Property Index, released yesterday, the national average asking price was up 2.7 per cent to $623,700 in October.
This followed five months of little movement and low stock, said head of Trade Me Property Nigel Jeffries.
"Usually by this time of year we expect to see the property market in full swing, but with the election in play it's pushed everything back. We're starting to see some of the movement we'd normally expect in this peak buying and selling season."
After five months of slowing down, average asking prices in Auckland went back up 2.2 per cent on this time last year to $916,900.