Most Kiwis still don't think house prices are going to stop rising, despite everything the Government has been doing and warnings from the Reserve Bank interest rate hikes are looming.
"Stubborn resistance" is the phrase used in the latest ASB Housing Confidence survey, out on Friday, which shows overwhelming confidence remains in a market already at record highs.
A net 64 percent believe prices will keep going up over the next 12 months ('net' is those who think it will minus those who think it won't - so a balanced result would have a score of zero).
"That represents a bit of a wobble from last quarter's 73 percent all-time high, but we're still talking about the third-highest reading in the 25-year history of our survey," ASB's report said.
It comes after the Government announced plans to strip landlords' ability to offset interest costs to reduce their tax liability and the Reserve Bank tightened lending rules to investors with small deposits.
The former policy in the UK helped bring price inflation under control, and the latter helped cool the market a few years ago, before it took off again post-COVID.
"It is notable that housing confidence remains at such high levels," said ASB senior economist Mike Jones.
"After all, there's been plenty of policy-related potholes for the market to dodge lately. [Loan-to-value] restrictions are back on, the loan repayment deferral scheme has come to an end, mortgage rates are no longer in free-fall and, in late March, some of the Government's recent tax changes came into effect.
"Housing confidence joins a number of other housing indicators pointing to stubborn resistance."
The median house price has doubled in the last seven years, from $400,000 in 2014 to more than $800,000 now. Nearly half of that rise has come in the past year - going from $620,000 at the end of May 2020 to $810,00 in April 2021.
Reserve Bank Governor Adrian Orr on Thursday said many of the fundamentals were pointing towards house prices going "sideways", perhaps even coming down, as the effects of the building boom and slowing population growth combined with tax changes and rising interest rates.
He said record-low interest rates were "unsustainable" and likely to start rising mid-2022. ASB's survey found just under a third thought they'd rise before then, and 41 percent that they'd stay the same. A minority - 10 percent - expects they'll come down further.
A net negative 21 percent think it's a good time to buy, "as gloomy as it gets for this index and completes a full reversal of the positive buyer sentiment prevailing this time last year", Jones said.
"It's not that surprising we've seen buyer perceptions deteriorate rapidly over the past year. After all, recent REINZ housing figures confirmed the current housing boom is now the most significant in recorded history with annual house price inflation marked at a heady 27 percent in April."
As for price expectations, Jones said it's likely ASB's next quarterly survey will show a further decline.
"We were already of the view house price momentum was starting to peak, and we might see a bit more of a drop in confidence next quarter as the full impact of the Government's tax changes are felt. But, so far, housing views have remained steady."
