Aucklanders sceptical house prices can keep rising
The housing crisis will get worse before it gets better - that's the message in the latest ASB Housing Confidence Survey, according to the bank's chief economist.
Nick Tuffley told The AM Show on Monday hopes the softening market will help people into their own homes are a bit premature.
"We're still seeing population growth outstrip building activity, so the housing shortage is going to get worse before it gets better.
"Interest rates have gone up a little bit, but they're still very, very low. We may see prices soften a bit in the short-term, but they will flatten off."
Across the country, slightly more people think it's a bad time to buy - that belief most strongly felt in Auckland.
"The reality is we still have very high prices in Auckland," said Mr Tuffley. "We need to build more homes to meet that population growth."
Slightly fewer than half - 46 percent - think prices will rise in the next 12 months, compared to 58 percent in November. It's the second-lowest level of confidence in the market recorded in the survey since 2012.
Despite Aucklanders feeling strongest it's a bad time to buy, price growth expectation was weaker there than anywhere else in the country, at only 36 percent.
Just over a third of Kiwis expect interest rates to rise in the next year.
"Recent lifts in mortgage rates appear to have respondents bracing themselves for more," says Mr Tuffley.
"While we expect the Reserve Bank to leave the official cash rate on hold until late 2018, funding pressures and higher offshore interest rates could see mortgage rates creep higher."
The official cash rate remained at 1.75 percent, a record low, at the Reserve Bank's latest announcement in February.