Uncertain time for house sales and values

Photo / Paul Estcourt

The residential property market is facing an uncertain year as the country strives to recover from the recession and investors react to the sector's tax changes, the latest New Zealand Herald Property Report says.

Property writer Bruce Morris says in the liftout in today's paper this year "could be the shocker" that property experts inaccurately predicted for last year.

The report contains comprehensive data from Quotable Value on average estimated values, median sale prices, and changes over preceding months and years for nearly 400 suburbs and localities in the North Island.

Bayleys Real Estate managing director Mike Bayley said the residential property market had mostly been flat this year in the upper North Island. Sales volumes traditionally picked up in February.

"That trend never happened this year, as investors sat on their hands waiting for last month's Budget announcement on residential investment tax changes."

Owner-occupiers had followed that trend.

But he said there were signs in Auckland City's inner suburbs, such as Remuera and Ponsonby, that the market was poised to recover sooner rather than later.

Valuations manager Glenda Whitehead, of Quotable Value in Auckland, told Property Report the company did not expect values would slide; nor were there signs of an improvement.

"We thought last year would be a poor one and Auckland largely got through that, but perhaps we were out by a year.

"Household debt is down, we're saving more and jobs are more secure," she said. "Against that, though, is the fact that banks are wary and higher interest rates are coming."

Morris summarises the post-Budget views of a property investor and commentators, which range from the prediction of a 5 to 10 per cent fall in house prices within a year, to a "2 or 3 per cent dip" over the next 18 months, with small rental rises.

Parnell took the prize for Auckland's biggest rise in average value, of 6.7 per cent, while New Windsor suffered the biggest slump, of 3.5 per cent.

Herne Bay confirmed its place as the dearest suburb - on average - topping $1.56 million, well ahead of Remuera on $992,389.

Bank of New Zealand chief economist Tony Alexander said prices would probably rise slightly next year, "after a few months perhaps of some final weeding out of the most cash-strapped investors".

UP OR DOWN

Increases or reductions in average estimated residential property values in the March quarter

Auckland City: 23 suburbs up, 18 suburbs down. Biggest increase Parnell, 6.7 per cent.
Waitakere: 11 up; 4 down. Biggest increase Glendene, 2.3 per cent.
Manukau: 18 up; 17 down. Biggest increase Manukau East, 6.1 per cent.
North Shore: 10 up; 13 down. Biggest increase Milford, 3.3 per cent.
Hamilton: 2 up; 20 down. Biggest increase Silverdale, 1.6 per cent.
Tauranga: 9 up; 7 down. Biggest increase Maungatapu, 2.6 per cent.
Whangarei/Northland: 10 up; 4 down. Biggest increase Kaikohe, 4.8 per cent.