First home buyers showing interest again

Photo / APN

New Zealand house prices remained essentially flat in the month of May, with government valuer Quotable Value Ltd. reporting signs of first home buyer interest picking up as interest rates remain low and banks relax lending criteria.

To the extent there were regional trends, housing values gained in Auckland but remained stable or declined in the rest of the country, according to QV's sales figures for May.

National property values are now 1.6 per cent lower than the same time last year, and 5.7 per cent below the market peak of late 2007, the data shows. That follows from April's figures, where values in the month were 1.9 per cent lower than the same month a year ago, and 5.8 per cent off the market peak.

While unrelated to the QV index and a less reliable measure of value change, the average New Zealand sales price over the last three months was $404,057, down slightly from $405,310 reported last month.

"While values remain static at a nationwide level, there continue to be differences between regions, with Auckland and Wellington showing contrasting trends" said Glenda Whitehead, a spokesperson for QV.

The data showed Auckland property values rose 0.3 per cent over the past year, with the steady increase over the past few months driven by tight supply in the country's most populous city.

"In the past few months (Auckland values) have begun to edge upwards and are currently 1.2 per cent above January, 0.3 per cent above the same time last year, and only 1.8 per cent below the market peak of late 2007," Whitehead said.

Wellington Property values fell 3.6 per cent in May compared to the same month a year ago, reversing recent gains, with the government's restructure of the public sector likely to weight on demand going forward.

The government valuer did not provide a reading for Christchurch due to delays in the sales process related to the Feb. 22 earthquake, but said demand for quality housing unaffected by the disaster continued to remain high.

Compared to May last year, Hamilton values were 3.5 per cent softer, unchanged from the previous month. Tauranga values were 1.8 per cent lower, following a decline of 1.7 per cent in April, and Dunedin property values decreased by 2.5 per cent compared with the May 2010, with the market steady ahead of the slow winter sales period.