House price confidence peaking

According to the latest quarterly ASB Housing Confidence survey, the current level of homebuyers and sellers anticipating climbing prices was last seen at the end of 2003, when housing activity was at its zenith.

Nick Tuffley, ASB chief economist said this result reflects the clear signs of momentum in the housing market seen in the second half of 2006.

House price growth has dwarfed household income growth and, for property investors, rental income growth has also been left behind.

While property owners will benefit from house price increases, it is cash flow that services any debt, not capital gains, Tuffley warned.