A net 29% of respondents said now was a good time to buy a house compared to 27% in the previous quarter, and house price expectations have also shown a modest rise from a net 9% in the January quarter with 11% now expecting house prices to rise.
"While more people now expect house prices to rise over the next year, that sentiment remains modest by past standards," said ASB chief economist Nick Tuffley.
"House price expectations remain highest in Auckland, in keeping with recent housing market data which shows stronger activity in this region compared to the rest of the country."
The survey also found a significant fall in the number of respondents expecting interest rate rises over the nest year.
"Just over a net 35% of respondents now expect interest rates to rise, down from a net 55% in the January quarter, " Tuffley said.
"This is unsurprising in light of the 50 basis point decrease in the OCR in March, and the resultant lower mortgage interest rates, which have increased the appeal of housing as an investment, despite the tax changes that came into effect on April 1."
The survey also found an expected sharp fall in housing confidence and price expectations in Christchurch over March, where despite an April rebound housing confidence in the region is still softer than overall confidence in New Zealand.
However, house price expectations are more resilient, with a net 9% of respondents in Christchurch expecting a rise in house prices over the quarter - only slightly lower than the nationwide average of 11%.
Tuffley said recent market data has pointed to tentative signs of an improvement in housing market activity, with the median number of days to sell a house having fallen to 45 days, though the measure still remains above the long term average of 38 days.
"Despite renewed interest in housing, it appears buyers and still in no rush to purchase," he said.
"We expect house prices to grow modestly at a rate of around 3% over the coming year. A combination of a contained level of housing inventory, positive population growth and the recent drop in interest rates will underpin a gradual recovery in underlying housing demand over the coming years."
A breakdown of the survey found 36% expect higher house prices (32% last quarter), while 24% expect lower prices (23%). The number expecting prices to remain the same has dropped from 37% last quarter to 33%.
"We expect a gradual recovery in housing market activity. Behind the lift in nationwide activity will be a range of experiences across the regions, from stronger price appreciation in areas such as Auckland, to ongoing weakness on areas where population and income growth are less supportive," the ASB report said.
"We expect house prices to be troughing now, and for modest growth in house prices over the coming year. The continued low level of residential building consent issuance raises the risk of an undersupply of housing over the coming years."
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