Bruce Cortesi
Rotorua property values have risen slightly in the past year, but figures show they lost ground elsewhere in the Eastern Bay.
Rotorua values increased 1.2 per cent to an average value of $275,017 in the year to October, says Quotable Value.
But Whakatane and Opotiki suffered a 0.9 per cent and 5.4 per cent slump respectively, with average values dropping to $294,755 and $201,710.
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 home 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 came to the fore.
McDowell Professionals Rotorua co-director Phil Hereford had not noticed any significant increase in sales turnover this year, which explained the slow increase in values.
He said the Rotorua market was "steady as it goes" and most properties were selling at between $250,000 and $450,000.
There had been a drop-off in first home buyers, and if lower priced properties did not sell that could have a negative flow-on effect to the higher tiers of the market.
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.
He says a yet-to-be released national survey of New Zealand mortgage advisers shows some advisers have experienced a 50 to 70 per cent drop in clientele, while those specialising in first home buyers have experienced a drop of up to 80 per cent since the restrictions came in on October 1.
However, 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 existing 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've 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."