Wanganui property prices fall by 2.1%

Wanganui property values have fallen in the past year, losing ground against other provincial centres.

Wanganui recorded a 2.1 per cent drop to an average of $187,363 in the year to December, according to state valuer Quotable Value.

Values remain well down on the 2007 market peak, the figures show.

By contrast, national property values rose at a 10 per cent annual pace to hit an average current value of $466,022.

In the past three months nationwide, values rose 3 per cent, and are now 12.5 per cent above the 2007 market peak.

Property Brokers Wanganui manager Philip Kubiak said that while sales had been steady, those in December had declined sharply compared with the previous year.

The lower sales volumes could be because first home buyers were "starting to feel the pinch" of Reserve Bank lending restrictions on high-risk, low-deposit loans, and leaving the market. Other buyers were looking for houses between the $150,000 and $200,000 mark.

For 2014, he predicted the larger centres would experience more buoyancy but did not think it would extend to the provinces. "I would advise caution for anyone who's thinking 2014 is going to be the big bubble.

"I think steady goes the way because interest rates are clearly tracking up and the Reserve Bank has pretty firm goals in mind as to what they want to happen in the housing market. I'm trying to be as positive as can be."

QV research director Jonno Ingerson said the provincial centres showed less of a clear trend over 2013 than the main centres. "Apart from Wanganui and Queenstown, all the provincial centres increased during 2013, but the increases were less than 5 per cent."

Most centres remained a few per cent below the 2007 peak, while Whangarei, Gisborne and Wanganui were more than 15 per cent below. "Compared to 2012, sales volumes dropped in many of the provincial centres by a few per cent."

He predicted the Reserve Bank lending restrictions would negatively affect property turnover and values this year. "Outside of Auckland and Canterbury there isn't the same imbalance between supply and demand. There generally aren't multiple purchasers vying for the same property, so the [Reserve Bank] speed limits are likely to significantly decrease demand and therefore prices."

An expected interest rate hike later this year would increase the cost of servicing mortgages, which would lead to people borrowing less and therefore offering less for properties, he said.

However, surging consumer and business confidence, particularly in the main centres, could counter those influences.

Overall, nationwide values were likely to increase modestly this year, mainly as a result of the surging Auckland market.