ASB Bank Says Outlook for New Zealand Housing Market Improved
New Zealanders are more optimistic about the outlook for the housing market following reductions in borrowing costs, according to an ASB Bank Ltd. survey.
Forty-five percent of 600 people surveyed said it is a good time to buy property compared with 37 percent in the previous survey in August, Auckland-based ASB said in a statement e- mailed to Bloomberg News. The proportion saying it is a bad time to buy dropped to 21 percent. The 24 point difference was the most optimistic reading since 2003.
Reserve Bank Governor Alan Bollard cut the nation’s benchmark interest rate by 3.25 percentage points since July to steer the economy out of a recession, and encouraged banks to pass on reductions to borrowers. Almost half of those surveyed expect home-loan interest rates will fall, fanning confidence in the property market, said ASB Chief Economist Nick Tuffley.
“Housing looks more affordable now that prices are lower and interest rates have fallen,” Tuffley said. Still “higher deposit requirements may blunt the usual effectiveness of that stimulus.”
Local banks are reviewing lending criteria and most now require new buyers to have at least a 20 percent deposit to qualify for a loan easy fast payday loans.
About 48 percent of those surveyed expect mortgage will fall compared with 30 percent in the August poll. Twenty-three percent expect higher borrowing costs.
Fifty-five percent of people expect house prices will fall over the next year, down from a record 64 percent in August.
“Respondents remain downbeat on the outlook for prices, which suggests buyers will be in no rush right now,” Tuffley said. “A pick up in prices remains some way off.”
House sales declined to the second-lowest level in 18 years in November, according to Real Estate Institute figures.
“The outlook remains bleak,” Tuffley said. “Fundamentals for the housing market are still unfavorable with prices still high relative to incomes and job security now carries a degree of uncertainty.”
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