ASB reports steady optimism with signs of caution
The latest findings from the ASB Housing Confidence Survey revealed that New Zealanders, particularly Aucklanders, continue to feel positive about the housing market, with a net 33% expecting house prices to increase, up from 24% last quarter.
However, there’s a notable slowdown in the enthusiasm for further decreases in interest rates, with the proportion of Kiwis expecting lower rates dipping from 57% to 51%.
Housing confidence: Auckland stable, Canterbury gains
While overall confidence in rising house prices remains strong, there are significant regional differences.
Confidence is highest in Auckland, yet Canterbury saw the most significant jump this quarter, rising to a net 38% from 25%. Conversely, expectations for lower interest rates have cooled, especially in Canterbury where optimism has shifted from the previous quarter.
Amid these regional trends, the New Zealand housing market is showing signs of recovery.
Residential property sales have increased from 59,000 in mid-2023 to nearly 71,000. Price gains remain modest, at about 2.5% since mid-2023, but the market is expected to see gradual improvement due to declining mortgage rates. Further supporting this outlook, a Reuters poll anticipates a 5% increase in home prices in 2025, following a significant drop from their late 2021 peak.
Economic signals impact housing sentiment: ASB chief weighs in
ASB Chief Economist Nick Tuffley (pictured) linked these attitudes to broader economic signals.
“These results align with expectations for a slower pace of OCR cuts for the rest of 2025,” Tuffley said. “Inflation is back under control, and the RBNZ has already cut the OCR considerably.”
Concerns about global economic impacts, such as potential inflationary pressures from political events like US President Donald Trump’s re-election, are also influencing sentiment.
Despite the cautious optimism, the ASB survey revealed a steady belief that it’s a good time to buy, with a net 23% positivity rate, slightly up from 20% last quarter. This sentiment is strongest outside of Auckland and in Canterbury.
Confidence high, market activity low
This growing confidence has not yet translated into increased market activity.
“Even though Kiwi are optimistic about house prices going up and are increasingly confident this is a good time to buy – we are yet to see much shift in housing market momentum,” Tuffley said.
This is corroborated by REINZ data, which shows a surge in new home listings but a decline in sales.
