Surge in listings, drop in prices

The NZ Property Report, compiled monthly by property listing website Realestate.co.nz, shows there were 179 new Wairarapa listings last month - 4.7 per cent more than in the same period last year.

Wairarapa's housing market enjoyed a surge in new listings last month but recorded the country's biggest drop in average asking price.

The NZ Property Report, compiled monthly by property listing website Realestate.co.nz, shows there were 179 new listings on the Wairarapa market last month - 4.7 per cent more than in September 2012.

But the local asking price fell 5.5 per cent from the previous month to $255,747 - the biggest fall nationwide. Wairarapa was one of only five regions that bucked the national trend to record asking price declines.

Bayleys Masterton owner Mark Morison said the lift in listings accompanied the onset of spring.

Another reason could be sellers rushing to get cheaper properties onto the market before the Reserve Bank lending restrictions took effect last week.

"It's the first-home buyers who are going to get hit the hardest. So maybe the owners have been putting their cheaper properties on for the first-home buyers to take advantage."

It was hard to predict how the changes would affect the Wairarapa market long-term, he said.

Mr Morison predicted some lenders would still issue home loans to borrowers with 10 per cent equity.

"But it's going to be pretty hard for first-home buyers unless they have assistance from family members."

According to the report, the average asking price for a house in New Zealand rose to an all-time high in September.

The national average rose 9 per cent to $466,526 in the past year and 0.7 per cent from the previous month - jumping almost $3000 in September to the new record price.

The Waikato and Coromandel also recorded new peak average asking prices last month, reaching $384,595, and $505,867 respectively.

Last month, 11,000 new listings were posted nationally, up 3 per cent from August.

The report said seller confidence had pushed prices up.

"The trend ... continues to show strength in seller price expectation, on the back of low listings, and strong demand in the main centres," it said.

"The rise in asking price was noticeable across more than half of New Zealand, with 14 regions reporting a rise in asking price."

The report comes at the same time as the Reserve Bank's "speed limit" lending restrictions on high risk loans.

Banks have been tightening their lending criteria in the leadup to the changes, with some cancelling pre-approved loans to borrowers with less than 20 per cent deposit.

The changes are expected to let heat out of the country's inflated property market, and cool housing bubbles in Auckland and Christchurch.

"It's too early to see how the Government's new mortgage lending restrictions will impact overall inventory and asking prices in the long term," said Realestate.co.nz acting CEO Phillip Dunn.

Sales through spring were expected to be strong and October traditionally heralded a fresh supply of new listings, Mr Dunn said.

additional reporting Patrice Dougan, APNZ