Most New Zealand consumers expect house prices to rise in the next 12 months as buyers spurred by low interest rates face a shortage of properties.
Sixty-six percent of respondents in a January survey expected values will increase over the next year compared with 64 percent in October, ASB Bank Ltd. said in an e-mailed report. The proportion expecting lower prices was unchanged at 8 percent.
“Listings remain low and have not kept up with the modest increase in demand,” Auckland-based ASB Chief Economist Nick Tuffley said in the report. “Housing inventory levels have fallen sharply and the market is tilted in favor of sellers.”
The Reserve Bank of New Zealand is considering ways to contain the nation’s “over-heating” housing market, Governor Graeme Wheeler said in a speech last week, as the official cash rate remains at a record-low 2.5 percent. Thirty-two percent of respondents expect higher borrowing costs over the next year and 39 percent predict no change, the survey showed.
Tuffley is among nine economists who forecast the central bank will maintain the current cash rate until at least the end of the year, according to a survey of 16 analysts by Bloomberg News last week. Seven predict a rate rise by then.
House prices rose 7.2 percent in January from a year earlier, the Real Estate Institute said Feb. 12. In Auckland, home to a third of the nation’s 4.4 million people, values surged 11.8 percent amid a shortage of new listings.