ANZ’s latest Property Focus report says the increasing strength of house sales volumes is spreading to provincial New Zealand.
Of the reports 10 property gauges that indicate pressure on house prices, one is pointing up, none are pointing completely down, two are stable but tending down and five are stable but tending up.
On the positive side are affordability, migration, supply and demand and on the negative side are global conditions and indebtness.
The report says household debt is up but low interest rates are keeping servicing costs are at a 10-year low. It describes interest rates as tempting and says competition in the market is leading to cheaper, longer fixed terms.
But ANZ's economists say rates longer than two years are still unattractive. "Despite increasing chatter in the media that “now’s the time to fix” given improved global sentiment and the rise in wholesale interest rates, we expect competitive pressure and lower bank funding costs to keep mortgages rates low for some time."
Supply is starting to creep up but still is well short of demand. The time to sell all the listings on the market is at an eight-year low nationwide and a nine-year low in Auckland.
ANZ says it expects a gradual improvement in the New Zealand labour market over 2013, which is a crucial requirement for a sustained market upturn.