Housing confidence rising, says ASB

Photo / Greg Bowker.

Housing confidence is on the rise in Auckland, while a new survey is showing growing uncertainty about tax changes and rising interest rates.

The latest ASB New Zealand Housing Confidence survey out today shows that respondents have been thinking more favourably about buying a house since the last quarter.

People in the North Island were more optimistic than those in the South. Expectations of increase in house prices are substantially higher in Auckland (56 per cent) than in other parts of the North Island (45 per cent).

This trend is also reflected further from Auckland in the results for South Island respondents.

Only 33 per cent of people in the South Island think it is a good time to buy a house this quarter compared to the national average of 48 per cent)

ASB chief executive Nick Tuffley says the South Island had "previously been the roaring bull."

Tuffley attributes the lift in house price expectations since 2009 to low levels of supply. Tuffley says buyers are approaching property with more caution and there are fewer houses on the market.

"Many homeowners are often unwilling to sell at lower prices and might still prefer to hold onto a property if possible. This dynamic could reduce the downward adjustment, with house prices more likely to remain around current levels for an extended period."

The report suggests there is uncertainty developing from the Tax Working Group's (TWG) proposed changes to housing investment. Although Prime Minister John Key has ruled out capital gains tax or land tax, any further lending and tax will be released alongside the budget in May.

Tuffley says he supports the new depreciation tax proposed by the TWG.