Wanganui house values drop by 5.3pc

Wanganui City PHOTO/FILE

Wanganui property values have dipped again, as home owners brace for another possible interest rates hike next week.

Figures released on Friday by state valuer Quotable Value show Wanganui recorded a 5.3 per cent drop in the year to May to an average value of $181,293.

Local values remain 19.1 per cent below their 2007 market peak.

Agent Ross Watson, of Watson Realty Wanganui, said the figures were a "fair reflection" of the Wanganui market.

Reserve Bank lending restrictions, which placed a 10 per cent cap on bank lending to those with less than 20 per cent deposit, were still taking first home buyers out of the market, he said.

"But it's not just Wanganui and I think that point needs be made known. It's high time that the Reserve Bank and the Government looked at how much of an effect they've had on the market."

Nationwide, property values jumped 8.2 per cent over the past 12 months to $471,791, and are up 13.9 per cent on the 2007 market peak. However, the increase was mainly driven by the over-heated Auckland and Christchurch markets.

QV national spokeswoman Andrea Rush said while values in all the main centres had increased to varying levels, some areas within the cities were showing decreases and values in many of the smaller regions were flat or decreasing.

"Sales volumes around the country are 10 to 15 per cent lower than they were this time last year which could be a normal winter seasonal effect but it could also be a precursor to values dropping."

The Reserve Bank lending restrictions continued to affect many regions, with slower sales in the first home buyer sector of the market, she said.

Meanwhile, it has been predicted the bank could raise interest rates again when it makes its next official cash rate announcement next week. The OCR is expected to rise to 3.25 per cent.

APNZ