LEAD STORY: Napier house values rise ahead of NZ

Napier property values are 6.5 per cent higher than they were this time last year, with an average May sale price of $344,934.
Quotable Value's residential property statistics for May show Napier's value growth is also ahead of the national average. Values across New Zealand are 5.6 per cent above the same time last year, having fallen back from the 6.1 per cent reported last month.
Hastings values are 3.3 per cent ahead of this time last year, but down slightly from last month's 3.6 per cent growth. The average sale price for May was $320,672.
Registered valuer Tim Wilkins of Snow Wilkins said Hastings values may have eased because of flow-on effects from the downturn in income in the agriculture, horticulture, viticulture and cropping sectors.
"This has had flow-on effects to the local Hawke's Bay economy and subsequently the residential property market." But Wilkins said agricultural returns look better for the next 18 months.
Nationally, values are 4.1 per cent below the market peak of late 2007, down from the 3.9 per cent reported last month as values in all the main centres have flattened or declined.
The national average sales price for the three months to May also decreased slightly to $403,070 from $405,235 in April.
Jonno Ingerson, research director for QV.co.nz, said in the second half of last year consumer confidence was returning after the recession and this flowed into the property market. Buyers competing for a relatively short supply of properties pushed up prices.
Early this year more properties came on to the market, but buyer confidence wavered as pre-Budget announcements and talk of rising interest rates created uncertainty for investors and homeowners. The increase in properties for sale combined with less demand has pushed prices down.
Since the Budget announcement, Ingerson said there is little evidence of a change in buyer or seller sentiment with QV valuers reporting no increase in the number of enquiries.
He expected sales volumes to remain static over winter and the lack of buyer confidence to continue to drive down prices in the short term.
Registered valuer Paul Harvey of Williams Harvey said interest rates are tipped to increase this week, which would not help stimulate activity.
Paul Whitaker, Hawke's Bay regional manager of Property Brokers, said spring could see investors enter the market again and create momentum from the bottom end. He said when the new tax cuts are introduced on October 1, more people could consider investing in property, "with most families having at least $40-$50 a week of extra income".