Housing bounces back

Nick Tuffley.
Nick Tuffley.
Housing market confidence has bounced back since the election eight months ago, with regional areas leading the way.

Expectations are largely unchanged that the Reserve Bank will eventually lift the interest-driving official cash rate from its record low 1.75%.

In October and January, just 17% and 16% of respondents to the ASB housing confidence survey expected house prices to rise, but for the bank's latest survey in the quarter to April, that had risen to 32%.

ASB chief economist Nick Tuffley said it was a ''significant jump'' to 32%, back to where it was before the September election.

''House price expectations remained the most bullish outside of Auckland and Christchurch, consistent with recent housing market data,'' Mr Tuffley said.

Last month Otago house prices reached a record $460,000, up almost 20% on a year ago, the real Estate Institute of New Zealand reported.

Similarly for April, Quotable Value data showed median house values in Dunedin, Central Otago and Queenstown Lakes were all up on a year ago, in a range from 8.5% to 12.4%; all above the 7.7% national average.

However, Mr Tuffley cautioned the market was ''past its peak for house price increases''.

''The cooling in the price expectations could be linked to stretched housing affordability and respondents' uncertainty over the impact of the Government's new housing policies,'' he said.

Other than in Canterbury, Mr Tuffley said, the majority of respondents believed now was not a good time to buy a new house.

''Considering the sizeable run-up of house prices in recent years and the stretched affordability, this was perhaps understandable,'' he said.

Mr Tuffley expects the OCR to move upward from August 2019.

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