Rebounding Housing Confidence Reaches 2020 Levels

New Zealand Housing Confidence Surges too 2020 Levels

Housing market sentiment in New Zealand has rebounded, mirroring the optimism seen before the pandemic-fueled boom. A recent survey indicates a critically important increase in the number of New Zealanders who expect house prices to rise, returning to confidence levels last observed in 2020. this resurgence comes amid fluctuating interest rates and a complex interplay of supply and demand dynamics across the country.

Key findings from the Latest Housing Confidence Survey

ASB‘s Housing Confidence Survey, which concluded in December, reveals that a net 33% of respondents anticipate an increase in house prices. Furthermore, a net 23% believe it is a favorable time to purchase property. Thes figures paint a picture of renewed optimism in the housing market, despite underlying economic uncertainties. However, there was a slight decrease from 57% to 51% in the proportion of people expecting interests rates to fall, before the Reserve Bank of New Zealand (RBNZ) cut the official cash rate to 3.75% on Feb. 19, 2025.

Regional Variations: Canterbury Leads the Charge

While overall confidence is on the rise, regional differences are apparent.Canterbury experienced the most significant increase in optimism, with a net 38% of residents predicting rising prices, up from 25% in the previous quarter. Auckland, however, demonstrated more wavering sentiment regarding buying conditions, suggesting a nuanced understanding of local market factors.

Expert Analysis and Market Dynamics

According to ASB chief economist Nick Tuffley, the survey results are consistent with expectations of a more gradual easing of the OCR throughout the remainder of 2025. “Inflation is back under control, and the RBNZ has already cut the OCR considerably,” Tuffley stated.

Tuffley also noted a potential “sweet spot” for prospective homebuyers: “For those considering buying a home, there is a bit of a sweet spot at the moment with interest rates continuing to fall, high levels of supply and subdued house prices.” Though, he also cautioned that the current abundance of homes for sale might be contributing to a more measured approach from buyers. Data from the Real Estate Institute supports this, showing an increase in new listings alongside declining sales figures.

Potential Headwinds and Future Outlook

Looking ahead, potential concerns remain. Tuffley raised the possibility of “some concern about the inflationary impacts of Trump’s re-election in the US,” indicating that international events could also influence the New Zealand housing market.

Returning to Pre-Boom Optimism

The current levels of optimism are reminiscent of the period leading up to the housing boom of late 2020 and early 2021. “Where we are now is pretty much on par with the optimism that we saw late 2020 early 2021, when we had the big boom in the housing market,” Tuffley explained. “certainly we’re back to feeling as optimistic about it being a good time to buy as we were when we came out of that first lockdown back in 2020.”

Navigating the Market: Opportunities and Considerations

• Falling Interest Rates: Take advantage of potentially lower borrowing costs.
• High Supply: Explore a wider range of available properties.
• Subdued Prices: Negotiate competitive deals in a less heated market.

Despite the positive trends, prospective buyers should remain vigilant and consider seeking professional financial advice before making any decisions. As Tuffley noted, “There still seems to be a little bit of caution in reality, and we woudl expect to see that caution will start to get thrown over to the wind as the year progresses.”

Conclusion: A Cautiously Optimistic Outlook

New Zealand’s housing market is showing signs of renewed confidence, presenting both opportunities and challenges for buyers and sellers. While the return to 2020 optimism levels is encouraging, it’s significant to remain aware of potential headwinds and to make well-informed decisions based on individual circumstances and market analysis. Stay informed about interest rate movements, housing supply, and global economic factors to navigate the market effectively. Are you considering buying or selling? Share your thoughts and experiences in the comments below.

How does the current level of housing confidence compare to previous periods of market booms, and what factors differentiate this current surge?

Housing Confidence Surges in New Zealand

An interview with Nick Tuffley, Chief Economist at ASB

Archyde news sat down with Nick Tuffley, the chief economist at ASB, to discuss the recent surge in housing confidence in new Zealand and what it means for the market in 2025.

New Zealand housing confidence has rebounded to 2020 levels. What’s driving this optimism?

Nick Tuffley: “The current confidence levels reflect a few key factors. Firstly, inflation is under control, and the Reserve Bank of New Zealand has cut the OCR, easing financial pressure on homeowners. secondly,there’s a sweet spot right now for buyers with falling interest rates,high supply,and subdued house prices. Lastly, Kiwis seem to have regained their appetite for property investment.”

Canterbury is leading the charge in optimism. Why is this region reporting the most significant increase?

Nick Tuffley: “Canterbury’s recovery from the 2011 earthquakes and growth in rebuild projects have likely contributed to its optimism. Additionally, the region offers relative affordability compared to cities like Auckland, making it an attractive option for both investors and first-time buyers.”

A net 23% believe it’s a favorable time to buy. What advice would you give to these prospective buyers?

Nick Tuffley: “I’d reccommend considering your personal financial situation and long-term goals. Even tho interest rates are favorable, it’s essential to ensure you can sustain payments. Also, keep an eye on global economic events, like Trump’s re-election, which could influence markets here in New Zealand.”

What are some potential headwinds that could impact the housing market in the coming year?

Nick Tuffley: “internationally,events like the US elections and Trump’s policies could cause some uncertainty. Locally, we need to watch the interplay between supply and demand, and also immigration policies that could affect the market.”

How does this renewed confidence compare to the period leading up to the 2020-2021 boom?

nick Tuffley: “We’re definitely seeing similar optimism, but there’s still some caution this time around. Buyers seem more measured,perhaps due to their experiences during the last boom and bust cycle. Nonetheless, I expect confidence to grow as the year progresses.”

for our readers considering buying or selling, what’s your parting advice?

Nick Tuffley: “Stay informed about market trends and interest rate movements. this will help you make well-informed decisions based on your individual circumstances and the broader market dynamics. Don’t hesitate to seek professional financial advice, too.”