New homes drop, but property value continue to rise

Consents for new dwellings spiked in February. Photo/File

by Sinelle Fernandez

The property market has levelled off in the last two months but experts are optimistic it will pick up again.

Figures released by Statistics NZ showed a decrease in the number of building consents for Manawatu-Whanganui in the last month.

There were 80 new consents issued for the region in June. But this dropped to 66 in July - a decrease of two compared with July last year.

However, the value of new dwellings had risen from $20 million in July 2016 to $21 million in July 2017.

Ray White real estate agent Tim Hocquard said the value of homes in Whanganui has been on a steady rise in the past few years but consents would not follow the same pattern.

"[Consents] can't continue to rise all the time if there's nothing available for someone to build on," he said.

Also, new builds depended on availability and affordability, Mr Hocquard said.

For local builders, this would mean planning ahead to compete with developers who acted as builders as well.

"A number of properties are being built by big companies, [rather than] individual builders building home after home. It's more so a larger company that might be building three or four homes at any one time.

"[A developer] who's got 10 or 15 sections at their disposal has dearly cornered the market on what type of house, and who's going to build it."

Of the entire wider region, nine of the building consents issued were for Whanganui.

Philip Kubiak, branch manager of Property Brokers Whanganui thought the lack of new houses should not affect Whanganui buyers in a large way.

"They're generally looking for good, solid, tidy family homes of three or four bedrooms," he said.

This year, there was a spike in new dwellings in February when 92 consents were issued for the Manawatu-Whanganui region. The June figure of 80 was a close second.

Mr Kubiak said the Whanganui market hadn't experienced as much of a dip as some of the bigger centres but there was a noticeable slowing of the market in the July/August period.

"In [those months], the amount of activity and the number of sales have been tapering off. But as we head into spring, things could spark up again."

There had been a shortage of rental properties also. "The demand has been strong and the supply has been weak," said Mr Kubiak.

He attributed the rental situation to tenants staying put in their homes and a lot of investment property owners selling properties to first home buyers.

Both agents agreed real estate stilled worked in a cycle, and numbers for buying, selling and listing houses were a seasonal affair.

The value for new building consents had decreased by 27.6 per cent since February, when it stood at $29 million.

The decrease was reflected in the overall New Zealand numbers.

Year ended July 2017, the national number of dwellings consented was 2762. This was down on the figure in July 2016 of 2811.