House buyers gain confidence

Confidence was buoyed by a recent, but short-lived, price war on fixed interest loans among the big banks, with rates as low as 6.9 per cent.

The survey also shows people expect house prices to keep rising, although some economists are picking prices to fall this year. Prices in some areas fell late last year.

ASB says a repeat of the price surge in the past couple of years is "unlikely" this year. "(But) we are not heading into a housing slump," says its chief economist, Anthony Byett.

That was shown by the fact that the market "took off quite quickly" when fixed-term rates were cut during the price war late last year.

"There is a lot of life there," he said. "We won't see the hype of the last three years, but it should be reasonably good – it won't slump away."

House prices nationally have risen about 40 per cent, excluding inflation, since mid-2001. Such big rises were not unusual in the past.

The latest ASB Bank housing confidence survey for the three months to January shows a net 5 per cent of those surveyed thought it was a good time to buy – reflecting overall optimism.

Those who thought it was a good time to buy, at 26 per cent, outweighed those who thought it was a bad time, at 21 per cent.

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