Majority anticipate price rises as fewer consider it a good time to buy, survey finds.
Expectations of house price inflation have hit a record high in ASB's quarterly survey, while the numbers who consider it a good time to buy a house continue to fall.
In the bank's latest survey, 63 per cent of respondents expected house prices to rise over the year ahead, upfrom 59 per cent three months ago and above the peak 10 years ago.
A seller's market is also evident in the net balance who consider it a good time to buy, which has fallen to 8 per cent from 13 per cent in the previous survey.
That may also reflect an increase in expectations that interest rates will rise over the coming year, to 30 per cent from 24 per cent last time. ASB's own view is the Reserve Bank will start to raise rates in March next year.
However, views on whether it is a good time to buy are still well above the levels prevailing during the housing boom of the middle of the last decade - when most considered it a bad time to buy but did so in droves.
ASB chief economist Nick Tuffley pointed to regional divergences among the survey results.
"Respondents outside of Auckland and Christchurch remain confident in the housing market and continue to see now as a good time to buy.
"However, in Auckland and Canterbury a net 10 per cent and a net 9 per cent respectively now feel it is a bad time to buy. This is likely to reflect the lack of listings in these markets. Double-digit price growth in house prices in these regions is also likely to be pricing some prospective buyers out of the market."
The improved confidence outside the two main centres suggested the pick-up in the housing market could be set to broaden, Mr Tuffley said.
In most centres, annual house price rises had remained in the 2 to 5 per cent range, in contrast to the double-digit inflation recorded in Auckland and Christchurch.
"Christchurch housing shortages should ease over the coming year. Building consents continue to surge, pointing to significant supply coming on stream - assuming construction can keep up with building intentions," Mr Tuffley said.
However, in Auckland, the increase in residential building consents had been very modest. "As a result, we expect Auckland's supply issues will persist, continuing to place upward pressure on house prices."
