More people expect house prices to rise and think now is a good time to buy, according to the ASB's latest housing confidence survey.
A net 22 percent of respondents in the three months ended July said now is a good time to buy a house, compared with 21 per cent in the previous quarter. Auckland bucked the trend with confidence dropping to 12 percent from 18 percent three months earlier.
A net 51 percent of respondents expect prices to increase, up from 45 per cent previously.
"Housing market data continues to show that the dominant feature of the market is a low level of supply, with inventory approaching record lows in Auckland but also declining throughout the rest of the country," chief economist Nick Tuffley said in the report.
"Prices are rising at a steady but moderate pace, and that is likely to continue."
Price expectations remained the highest in Christchurch, where a net 77 percent of respondents expect prices to rise. That will continue "to be pushed up due to the current shortage of habitable property," Mr Tuffley said.
Interest rate expectations showed the largest change for the quarter with those seeing rates rise in the next 12 months falling 22 points to 21 percent.
"That is not surprising given that, during May and June, speculation built that the Reserve Bank of New Zealand would cut the Official Cash Rate, largely as a response to events in Europe," Mr Tuffley said.
Figures last week showed property values and homes sales jumped in July. Home sales rose 20 percent last month, according to Real Estate Institute figures, while property values rose 2.2 percent in the three months ended July 31, according to government valuer QV.
NZN