House prices remain steady

Last updated 12:00 07/03/2014

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The average Palmerston North homeowner would struggle to buy a petrol station pie if they cashed in the amount their house rose in value in February.

Figures released yesterday by Quotable Value, the country's state-owned valuation company, show the average value of a house in Palmerston North is now $287,384.

This is up 1.3 per cent, just under $4000, on the same time last year, but values rose last month by just $3.

It was a sign the housing market in the city was in a plateau, Real Estate Institute Manawatu manager Andy Stewart said.

"I know we're stable but it's surprising we're that stable.

"We're in a bit of a slower market and it seems like we're grinding from a seller's market to what is becoming a buyer's market."

Volumes were down and Reserve Bank lending restrictions had caused a "real problem" at the bottom end of the city's housing stock, Mr Stewart said.

"We may be in for a bit of a tough time in the marketplace until something actually happens, whether that is interest rate rises or something else that just changes things up a bit."

Nationwide, house values continued to rise - 9.3 per cent in the past year.

Value changes in the provincial centres across New Zealand have been patchy. In the North Island, the South Wairarapa District was up 4.9 per cent over the past year while the Taupo District decreased by 4.9 per cent in the same period.

In the South Island, most areas saw an increase in annual growth, including Nelson, which was up 3.2 per cent, and neighbouring Tasman District, up 3.8 per cent. In Central Otago, property values increased by 7.2 per cent, Ashburton was up 6.3 per cent and Timaruup 5.5 per cent.

QV spokeswoman Andrea Rush said the Reserve Bank's limits on low-deposit mortgages were having an effect.

"Last month was the very first sign that the steady upward trajectory on the New Zealand, Auckland and Christchurch values over the past couple of years is starting to level off," she said. "This is a clear indication the LVR caps are taking effect and they appear to have led to a reduction in the rate of value growth in the residential property market."

QV said property values in the Auckland region had continued to rise last month, increasing year on year by 14 per cent. Values in Christchurch were up 11.1 per cent year on year, but valuers noted that the post-earthquake panic was slowing.

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- Manawatu Standard

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