House price dynamics could reach the highest level in the whole country, because the housing market is approaching being a "buyer market", according to ASB chief economist Nick Tuffley.
While home prices in many regions across the country are 40% -70% higher than in 2007, annual profits are typically 10% or less, and the quarterly price increase has mainly decreased to single digit profits in many places.
The difference between the number of respondents and the quarterly ASB trust survey, who believe that this is a good time to buy, or a bad time to buy, has become a gap, becoming the market for buyers on the market of long-term sellers.
Tuffley said: "This trend has been reflected in all regions and strengthens our view that the rise in property prices in many regions of New Zealand has reached the highest level."
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For three months to October, the number of people from the survey, who thought it was a good time to buy, increased from 14% in the previous quarter to 16%, and those who thought it was a bad time to buy, kept fixed 19%.
"Combining the slowdown in home prices in most parts of the country, more homes to choose from and a favorable interest rate perspective is likely to increase the number of respondents who think it is a good time to buy a home," said Tuffley.
Among the respondents, 51% said that it was neither good nor bad, and 14% indicated "I do not know".
Tuffley said in general that people's views were still pessimistic, but it was "only a handful" who thought it was a bad time to buy.
"The percentage that thinks it is a good time to buy has reached the highest level since April 2016." – He said.
There is also an impetus for expectations that mortgage rates will be lower, although it is a minority of respondents.
Last week, the Reserve Bank indicated lower probability of lowering the interest rate in terms of the official cash rate, which has been record low for two years and amounts to 1.75%.
Tuffley said that more and more respondents had lower expectations
mortgage rates that probably took shape due to falling mortgage rates and that the central bank will leave OCR suspended for longer.
However, the Reserve Bank did not indicate any changes to the OCR at the beginning until the middle of 2020. Until then, the economists also did not expect a change.
While most respondents still expect higher interest rates, they dropped from 37% in the previous quarter to 33%.
Those who expected lower interest rates increased from 6% to 7%.
"7% who expected a mortgage interest rate drop in the next 12 months were the highest in two years," said Tuffley.
Since August, interest rates on mortgage loans in the bank have dropped in most fixed terms.
"With question marks over the prospects for growth in New Zealand and the implications of a slower inflation rise, many commentators suggest that the OCR will probably be longer," he said.