Stability seen despite house prices falling

Harcourts Wairarapa managing director Prue Hamill said although the number of sales were slightly down in the region on last year, the market was still showing a lot of activity.

Wairarapa house prices last month were down more than 16 per cent on a year ago, figures show.

Latest Real Estate Institute of New Zealand (REINZ) figures show the median Wairarapa house price in July fell $42,500 year-on-year to $215,000, while the number of July house sales slipped from 67 to 65.

Harcourts Wairarapa managing director Prue Hamill said although the number of sales were slightly down on last year, the market was still showing a lot of activity.

"My feeling is the market's fairly stable.

"Interest rates are attractive and we've still got buyers out there."

Some banks were still offering interest rates under 6 per cent, she said.

"We're still getting really affordable rates there, and, of course, this area's really attractive for cheaper housing."

Although fewer first-home buyers were purchasing properties because of the Reserve Bank lending restrictions, they were coming back into the market.

"The banks are finding ways around it and they can [also] build new [houses]."

Land sales were also starting to increase, particularly around Greytown, Ms Hamill said.

The number of houses sold nationally in July fell 13 per cent compared with the corresponding time last year to 5893, but were up 2.3 per cent from June.

July's national median price rose 8.1 per cent - or $31,000 - from the previous July to $416,000, but that was 2.6 per cent lower than in June.

Last October, the central bank introduced restrictions on high loan-to-value mortgages to take the steam out of the housing market in Auckland and Christchurch which it said could stoke inflation.

Since then, bank governor Graeme Wheeler has embarked on a tightening cycle, starting in March, that has lifted the official cash rate to 3.5 per cent.

REINZ chief executive Helen O'Sullivan said Reserve Bank measures and the upcoming election were likely influencing buyer behaviour.

"Reports on the effects of the LVR restrictions continue, particularly from the regions, where the reported lack of able buyers is filtering up the price points and on to vendor behaviour," she said.

"It is worth nothing that Auckland and Canterbury/Westland accounted for more than 100 per cent of the increase in the national median price between July this year and July last year, a further indication that the 'national price' is being driven by these two regions alone."