* A cooling housing market appears to have cooled expectations for higher house prices.
* But interest rate expectations continue to climb higher, reflecting recent litts in mortgage rates
* Overall, respondents still think it's a bad time to buy a house, but are less pessimistic than 3 months ago
Fewer people expect house price increases, according to the latest ASB Housing Confidence Survey, especially in the North Island. However, every region registered fewer respondents expecting house price gains in the three months to January. This survey corresponded with a significant drop in housing market activity following the RBNZ’s latest investor focussed loan-to-value ratio (LVR) restrictions. Not only has housing market data shown a fall in sales activity recently, it has also suggested house price growth has slowed in a number of regions. It is likely that weaker market activity has impacted on respondents’ house price expectations this quarter. The drop in respondents expecting house price gains was most acute in Auckland and a degree of “surely prices can’t keep rising?” might also be impacting respondents’ answers, especially as average Auckland house prices hit the $1m mark late last year.