Expectations that house prices will keep rising in New Zealand remain high, despite Government policy changes and a slowing market, a new survey by ASB Bank shows.

A net 64% of respondents to the ASB Housing Confidence survey, which covers the three months ending April, expected house prices to keep climbing during the next year. While that was down from the record 73% recorded in the last quarter’s survey, it was still the third highest result in the 25 years the bank had been running the survey.

Respondents in Auckland were the least optimistic with a net 58% of respondents expecting house prices to continue rising. This was most likely due to the fact that prices are now 27% higher in the city than they were a year ago. But respondents from the rest of the North Island, Canterbury and the rest of the South Island all had price expectations above the national average, with a net 66, 67 and 68% respectively, picking increases.

The result came after the Government’s announced housing policy changes in March, which were intended to slow down the runaway market. A net 21% of respondents said it was a bad time to buy a house, which was a big change from the last survey when only a net 8% of people thought it was a bad time to buy.

The survey also showed that views on mortgage rates were changing, with a net 20% of respondents now expecting them to rise. It was the first time rate expectations were in positive territory since April 2019, but most still picked rates to stay the same over the next 12 months.