Auckland’s property market isn’t yet overheated but a lack of supply is giving it added strength, says ASB chief economist Nick Tuffley.
The bank’s latest housing confidence survey shows that house price expectations reached record levels in the three months to October.
A net 56% of respondents expect prices to rise over the year.
Price expectations are highest in Auckland and Canterbury.
Nationwide, a net 23% of people think now is a good time to buy a price, up one point on the last country.
But housing confidence is falling in Auckland, down to 8%. Tuffley said a lack of listings was making buying tough.
“The number of listings is lower now than it was at any time during the last boom.”
Statistics for the year to June showed an extra 21,7000 people moved into Auckland, but only 4200 homes were consented for. A 20,000 population increase would usually mean 10,000 more homes were needed.
“Population growth is outstripping the supply of new homes.”
Tuffley said increasing confidence that interest rates will stay low is also driving buyers. “That’s fuelling a bit less caution than we’ve had in the past. That degree of confidence is encouraging people to start looking.”
ASB expects interest rates to start rising at the end of next year, but to move up slowly.
Tuffley said an OCR cut was unlikely.
“Low interest rates are becoming increasingly stimulatory, and the RBNZ will be mindful of the risks of stoking the housing market further.”