House values up, but buyers run out of 'urgency'

Photo / Herald on Sunday

Property values are 6.1 per cent above the same time last year but buyers are cautious, commentators say.

Quotable Value statistics show the national average sales price last month was down to $407,133 from $416,074 in February.

Nationally, values are 3.9 per cent below the market peak of late 2007.

QV spokeswoman Glenda Whitehead said the first quarter of the year was markedly different from the second half of last year.

"Not only have values remained relatively flat for the past few months, but the urgency among buyers has all but gone."

The usual seasonal increase in listings over the past two months had given buyers more choice, but sales activity remained subdued.

"Buyers appear to be holding back as concerns linger over job security, bank funding is seen as difficult to secure, and any tax changes remain unknown," she said.

"The properties that are selling well are those that are well presented and appropriately priced.

"Buyers are generally being thorough in their research, and offers are often full of conditions." QV expected values to remain stable rather than decline over the coming months.

"The range of factors affecting the property market remains finely balanced. How these factors change over the coming months will determine which way the property market goes."

Values have fallen over the past few months in all the main centres, but are still above the same time last year.

The Auckland region is 9.9 per cent up, Wellington 6.6 per cent, Christchurch 6.9 per cent and Dunedin 7.3 per cent.

Provincial areas show more variation in values.

New Plymouth and Palmerston North with 7.6 per cent and 7.3 per cent growth respectively are outstripping cities such as Rotorua, Gisborne and Nelson which are growing at between 4.5 and 5.4 per cent.

Queenstown Lakes had a decrease of 1.8 per cent.

Institute of Economic Research economist Shamubeel Eaqub said that while it was clear prices had recovered it wasn't crystal clear by how much because houses at the lower end of the market were notselling.

"All the sales that we have had ... are the very high priced ones. "The median price looks to be very high despite the fact that volume is down."

He said the "household wallet" still hadn't recovered from the recession.

This, together with interest rates increasing, policy uncertainty over investment property tax rules, slow employment and wage growth and there were "stiff headwinds" ahead for the housing sector.