A total of 33% of respondents to ASB’s survey said they believed the OCR rate would go up over the next year, up from 32% in the three months to April.
Interest rate expectations were broadly similar across the country, with 31% to 33% of people expecting a rise over the next year.
The expectations come despite the Reserve Bank’s surprisingly cautious statement last week. The central bank said it expected the OCR rate to remain at an historic low until 2020, due to sluggish economic growth.
ASB’s Nick Tuffley said consumers were confident rates would remain low in the long term: “We expect the OCR to move up from November 2019, but assume a gradual path of policy tightening and a historically-low OCR endpoint this cycle. This should ensure that mortgage interest rates stay reasonably low over the next few years and is likely to temper respondents’ expectations."
ASB’s survey, covering the three months to July 2018, found 38% of respondents expect house prices to rise over the coming year.
While this is a big jump from the 16% of respondents who expected higher house prices in the three months to February this year, it is well down on the average of 44% recorded since January 2015, indicating caution in the market.
Higher price expectations were evident in respondents across all regions, but Aucklanders were the least optimistic at 21% (up from 19% last quarter).
In contrast, Canterbury expectations increased the most, with net expectations increasing by 11% to 32%, the highest level since April 2017.
More Cantabrians believe now is a good time to buy a house as compared to respondents from other regions.
House price expectations remain the most upbeat in other regions, with the rest of the North Island lifting to 49% and 48% registered in the rest of the South Island.
