Properties at lower end of the market selling faster

First National Group general manager John Stewart. Photo / supplied

Houses at the lower end of the market are selling the fastest as buyers take advantage of low interest rates, research by real estate firm First National has found.

Cheap do-ups, houses targeted at first-home buyers and entry-level family homes rank as the fastest sellers for the majority of First National's 70 offices across the country.

Half of respondents cited low interest rates as the catalyst for the sales.

First National Group general manager John Stewart said the latest figures were a continuation of a trend, first noted late in 2010, for first-home buyers to be demonstrating increasing confidence that now is a good time to buy.

"First-home buyers realise this is their chance. In most regions, prices have bottomed out and there are more and more multi-offers. The best homes - those that are well presented and well priced - are being cherry-picked," he said.

A 'significant proportion' of people were also upgrading to their second home, helping to boost sales in this bracket, First National said.

High-end properties were top sellers in just 5 per cent of regions.

The survey measures listing levels, sales, market trends and overall activity and found house prices had deteriorated further during June compared with May and were also lower compared with the same time last year in 57 per cent of areas where respondents worked.

In June 2010 65 per cent of respondents said prices were lower compared with June 2009, so the June 2011 result of 57 per cent was an improvement, First National said.

In the latest survey, three-bedroom homes recorded lower prices compared with a year earlier, excluding the Canterbury region which saw an increase.

Half of respondents reported increased buyer interest and optimism, however customers were being choosy due to a lack of new listings coming on the market and vendors' unattainable expectations.

"A number of homes have been for sale a long time due to vendors retaining unrealistic expectations, so the market is stalled," Stewart said.

Listing figures are down 2.4 per cent since May 2011 and down 10 per cent compared with June 2010. Many First National offices were reporting a shortage of properties.

The number of contracts exchanged in June fell from the previous month and a year earlier, expect in Howick, Blenheim and Hawera.

Investor activity continued to be low across most of the country, except for the upper South Island, where agents noted an increase in inquiry for cheaper accommodation.

Stewart said buyer interest for property at the lower end of the market would probably lead to more sales of three and four bedroom homes in the coming months.

"Also, the strength in the rural economy will trickle back to provincial centres and this will influence sales of retirement-style homes in popular centres such as Mount Maunganui, Whakatane, Alexandra, Nelson, the Kapiti Coast and Geraldine.

"These centres are the litmus test as they are likely to be the last market to recover from the recession," Stewart said.