Confidence lacking in house market

BEN STRANG
Last updated 13:07 12/11/2012

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Kapiti Observer

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House prices in Kapiti have risen by only half a per cent over the past year, while the national average has risen by nearly six.

The latest Quotable Value figures show national house prices have gone up by 5.7 per cent in the year through to October, but this was mainly driven by Auckland and Canterbury.

Re/Max Northside owner Roger Tucker said local house prices have been stagnant over the past year, as has much of the country.

"It's a very misleading statistic," he said.

"They're based on basically Auckland and Christchurch. Everywhere else is going nowhere."

Mr Tucker said in the month of October there were 110 sales between Paekakariki and Otaki, including sections.

While that number is up from 81 sales in October 2011, the number is still well down from the 200-plus sales per month in 2006 and 2007.

"When you compare that to how many properties are on sale, which there are 747 listed on realestate.co.nz, and even if you take off, say, 100 for double- ups, when you've got 110 properties selling out of 650 that doesn't tell you it's a vendor's market. In the end it's just lack of confidence. They're not sure about what's happening tomorrow."

In the Wellington region, Mr Tucker said the lack of confidence in potential buyers is partly because of concerns about employment.

"One thing to understand about the greater Wellington market is that it is very much a public service city.

"There is all these people being laid off in the public service, and it breeds no confidence. People won't go out and spend or buy because they're not sure if they'll have a job tomorrow."

While Kapiti's average property value is $357,704, Porirua rose 3.4 per cent in the past year to $371,014, and Mr Tucker said people commuting to Wellington were more likely to buy there.

"Why would you buy in Kapiti, when the cost of getting to Wellington is increasing, and you can get a house for the same price in Titahi Bay, for example, and cut an hour off your travel?"

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- Kapiti Observer

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