People are almost evenly divided on whether now is a good time to buy a house, ASB Bank's quarterly survey of housing market sentiment has found.
Of the 600 people surveyed between February and April, 24 per cent considered it a good time to buy and 25 per cent thought
it was not.
The net 1 per cent negative compares with a net 5 per cent positive figure three months earlier.
Reflecting the rebound in the market since the last quarter of 2004, a net 28 per cent expect house prices to increase, up from 9 per cent three months earlier.
And a net 62 per cent expect interest rates to rise in the next 12 months, up from 51 per cent.
The survey has a margin of error of 4 per cent.
ASB chief economist Anthony Byett said that since Easter lending activity had slowed.
"But equally some of the fixed rates are creeping down as well. So it could easily rebound."
Up to the end of March, the most recent official figures available, demand for home loans showed no sign of abating. That is despite the debt burden being at record levels.
Interest cost as a percentage of household disposable income has broken out of its normal 5 to 9 per cent range and is heading towards 11 per cent.
"All it needs now is some sort of shock or trigger and the impact of that debt comes through," Byett said.
A recent informal survey of property investors through the website of BankDirect, ASB's online banking arm, suggests investors are still buying despite low rental yields.
Of the 426 people who either had five rental properties or were planning to, 77 per cent said they planned to buy again within a year.
"These are serious property investors informed about the market and they are sold on the long-term possibilities," Byett said.
