Masterton property values slip

Bayleys Masterton owner Mark Morison said the decrease in Masterton values was due to first home buyers snapping up properties in the lower price range.

South Wairarapa and Carterton property values have risen in the past year, but new figures reveal Masterton has lost ground.

South Wairarapa values led the charge with a 5.1 per cent increase in the year to October to an average value of $296,357, followed by Carterton, which recorded a 0.4 per cent increase to $243,729, according to state valuer Quotable Value.

But Masterton suffered a 0.7 per cent dip, with average values dropping to $238,259.

Across the region, values remain well down on the 2007 market peak, the figures show.

New Zealand property values rose at an 8.9 per cent annual pace to hit an average current value of $457,312, driven by a shortage of houses in Auckland and Christchurch.

QV research director Jonno Ingerson said new Reserve Bank caps on low-deposit loans were likely to affect property values and the volume of sales. The effects would be most felt by first-home buyers and in provincial areas, but it would be some months before any evidence showed.

Bayleys Masterton owner Mark Morison said the decrease in Masterton values was due to first home buyers snapping up properties in the lower price range. Carterton values had increased slightly, as buyers who felt Greytown was becoming too expensive were "moving up the valley".

Although South Wairarapa values had the biggest increase, average sale volumes were low, so it only took one high-end sale to skew the figures, he said.

Professional Advisers Association chairman Bruce Cortesi said "without a doubt" mortgage advisers nationwide had been forced to turn away first home buyers who did not meet the new lending criteria of a 20 per cent home deposit.

A yet-to-be released national survey of mortgage advisers revealed some advisers had experienced a 50-70 per cent drop in clientele, while those specialising in first home buyers had experienced a drop of up to 80 per cent since the restrictions were enforced on October 1, Mr Cortesi said.

The ramifications stretched wider than mortgage advisers, with other sectors such as property valuers, conveyancers, real estate agents and builders reporting a decrease in business.

"You can actually see the snowball effect. It's not immediate but it is going to find its way into all those industries."

Mr Cortesi said another casualty of the restrictions were home owners seeking to consolidate credit card debt, which took them over the restrictions' threshold with banks, or wanting to increase their mortgage to make home modifications.

"What's the impact for those people?

"Does it mean they have to struggle financially because they have got to service a high-interest debt?

"Does it mean they lose their home over a long period of time because they have to beg, steal and borrow to stay afloat?"

Mr Cortesi said some more desirable regions such as Bay of Plenty and Hawke's Bay could see a spike in buyers coming in from Auckland and Christchurch.

"You could see the prices in those [provincial] regions starting to increase."