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NEW ZEALAND could be on the verge of another surge in housing activity, according to the latest ASB Bank quarterly housing confidence survey.
The survey showed that most people expected house prices to rise, an expectation that waned during July.
ASB chief economist, Anthony Byett said that while other confidence indicators in the latest survey were mixed, the overall outlook remained positive, underwritten by a strong demand for houses.
"The mixed nature of people's response to the survey relates to the disparity between high expectations of rising house prices but a low belief that now is a good time to buy."
Mr Byett felt the contradictory opinions were partly due to people's anxiety about the global economy.
Fixed lending rates had declined recently, rekindling housing activity, and as people became less fearful of higher interest rates, Mr Byett predicted an even more positive outlook.
The survey shows that during the September quarter, an average 4-5 per cent of respondents believed that house prices would increase (54 per cent in the June quarter).
Twenty-four per cent believed it was a good time to buy a house (against 35 per cent previously) and 53 per cent believed that interest rates will increase (71 per cent).
Mr Byett said Auckland had the potential for the highest house prices, due to a shortage of suitable property and people's expectations.