House price expectations crept lower in the three months to January according to the latest ASB Housing Confidence Survey. Interestingly, however, a North/South divide seems to have established itself in the last three months. That is, while overall price expectations dipped, this was driven by respondents in the North Island. In contrast, South Island house price expectations rose in the three months to January. Price expectations lifted the most in Canterbury (a net 11% expected higher house prices, up from a net 8% in the previous survey), but were also slightly higher in the South Island excluding Canterbury. Interestingly, this finding is in line with other recent household surveys, including our recent Investor Confidence Survey, which showed sentiment to be more positive in the South Island (and particularly so in Christchurch). However, there is a risk that house price expectations ease further as the Government’s new housing policy changes are likely to dampen investor demand across NZ.
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