House prices rising

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HOUSE prices here are close to rivalling the record peak of 10 years ago, a new report indicates.

CoreLogic’s Pain and Gain report for the June quarter of the year shows while Gisborne, Invercargill and Whanganui experienced a higher proportion of loss-making sales in recent years than elsewhere, the drop from the previous quarter was significant — from 14.5 percent to 6.1 percent.

“This is likely a reflection of the fact average values in Gisborne are still not back to the same level as the previous peak of the market in 2007,” the report stated.

However, those Gisborne losses worked out at a median average loss of just $1000.

The Pain and Gain report is a quarterly analysis of homes which were resold over the quarter.

It compares the most recent sale price to the previous sale price in order to determine whether the property sold at a gross profit or gross loss.

Real Estate Institute regional director Philip Searle said people selling houses first bought at the 2007 house price peak were experiencing only “negligible” losses.

“Gisborne, along with many other areas of New Zealand, did experience a significant drop after the peak of 2007 and owners who sold after the peak often did take a hit,” he said.

“But one must bear in mind that many people who sold at a loss purchased in the same market, so there was often negligible difference to them.”

Mr Searle pointed out that up-to-date statistics from REINZ showed the market here had turned around in the last few months.

“Overall, we are back to 2007 levels in many cases. February this year showed a median sale price of $320,000 and while the medians have come back, they will continue to move around.

“Depending on the time of year and what value properties sell in a given month, the trend has been a steady improvement in values.

“The Gisborne market continues to be solid and as we have come out of winter we will see an improvement in the number of properties sold and, I expect, the median sale price.”

Mr Searle could not forecast if prices could better those of 2007 in the coming year but said he did not expect the overall market to go backwards.

“There seem to be quite a number of people moving to town, demand for good rental properties is still high and that generally will cause the median to lift,” he said.

“Gisborne does tend to ebb and flow a bit on a month-to-month basis but currently the trend is upwards, and I can’t see this reversing.”