Rising house prices not a concern
There are more people pleased that house prices are rising than worried about them, BNZ’s latest consumer confidence report shows.
Monday, November 11th 2013, 12:00AM
by The Landlord
The survey reported a recovery in the net percentage of people who are pleased with the direction of the housing market. A net 13% now welcome higher prices, up from 6% last month and 11% two months ago.
A result of 0% would indicate that as many people were feeling positive as were feeling negative.
Residential real estate agents told the survey that the market was weakening in the regions because of the new loan-to-value restrictions. But many Auckland agents said there were still not enough homes for sale to meet the demand.
Harbour Asset Management's director, fixed interest, Christian Hawkesby, said the LVR restrictions might cool the market in the short-to-medium term but it would be affordability that eventually put the brakes on.
“The house price to disposable income ratio in New Zealand is still elevated at around 4.5. This is not only high by historic standards but the IMF, OCED and rating agencies all highlight that it is also high by international standards. Debt servicing costs in New Zealand have been eased by record low mortgage rates, but could start to bite in a rising interest rate environment.”
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