GOVERNMENT TORPEDOES FAIL TO SINK MARKET

There has been a modest decline in housing confidence, but Kiwi’s perceptions of house price growth remain around a level seen during the peak of price confidence in past housing booms, a recent survey reveals.

The latest ASB survey shows in the three months to July a net 58% of people expected house prices to rise over the following 12 months, down from a net 64% in the three months to April and a net 73% historical peak in the three months to January. The current net balance is made up of 65% expecting prices to increase and 7% expecting declines.

This is despite widespread predictions from economists of a slow down or even a price drop.

Because of this hard-to-shift mindset about house prices, the ASB has revised its annual growth upwards to 22% this year, mainly reflecting how resilient prices have been to date.

ASB chief economist Nick Tuffley says, however, the tide is going out, and there will be just 2% growth next year