Northland's once-booming coastal market appears to be the main reason the region is the last in the country to see a lift in values.
Northland was the only area in the country to not see an increase in property values on the previous year, according to Quotable Value NZ's January figures.
Nationally the average sale price for the month rose by 4.4 per cent to $409,807 on January 2008 but in Whangarei the average sale price in January fell by 3.9 per cent to $330,076; in the Far North by 1.9 per cent to $373,202; and in the Kaipara by 2.7 per cent to $323,444.
It is the second month in a row that Northland was the only region in the country to experience a price fall on the same period the previous year.
QV registered valuer Glenda Whitehead said there were a number of reasons why the region was still behind last year's average sale prices.
One of the main ones was the effect of the once-booming coastal market, she said.
In the years leading up to the October 2007 real estate price highs, Northland's soaring values were sparked largely by a huge increase in demand -and prices - for coastal property. At one stage some coastal properties were selling for more than double their registered value.
But that boom had now ended and there were a large number of "cheap" sections in coastal areas that were affecting the prices of homes, she said.
During the coastal boom there was also unprecedented subdivision along Northland's coastline and many of those sections were now on the market for sometimes several hundred thousand less than two years ago.
Ms Whitehead said while QV did not include section sales in its property sale data, they did have an impact by forcing down the price of coastal properties.
"There has been an oversupply of sections on to the market and the flow-on effect is that it lowers the value of the sections, which then flows on to the prices of existing homes," Ms Whitehead said.
"The coastal market seems to be taking longer to recover."
She said part of the issue was that coastal sections or properties were generally second homes and when times were tough, as during the recent recession, one of the first things to go was the bach.
As a result, many people had lost huge amounts when selling those second properties to stop themselves getting into financial trouble.
Ms Whitehead said home-buyers remained cautious in the face of proposed tax changes.
Property Investors Federation president Martin Evans said investors were resisting purchases until the specifics of the tax reforms were known, expected today.
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