Region hurt by housing brakes

00:09, Mar 17 2014

Moves by the Reserve Bank to slow the housing market in Auckland are hurting Marlborough, real estate firms say.

Reserve Bank Governor Graeme Wheeler upped the base interest rate on Thursday to 2.75 per cent, in an effort to slow the housing market increases in Auckland and Christchurch. The rate hike adds to the equity limit imposed on mortgage lending last year, which requires people to have a 20 per cent deposit to buy a home.

Harcourt's NZ chief executive Hayden Duncan said the changes had made it more difficult for people, particularly in South Island provincial areas such as Marlborough, to buy homes.

The restrictions had not had the expected impact in Auckland or Christchurch, where prices were up 18 per cent, he said.

"Although some first-home buyers and investors were temporarily deterred from making a purchase, they have found their way around the need for a 20 per cent deposit by using second-tier lenders and borrowing from family. Of concern are reports some borrowers are using credit card debt to make up their shortfall."

It was different in provincial New Zealand, where Harcourts' agents reported a cooling off in the level of interest and prices, Mr Duncan said.


"There has been an increase in the average price compared with the same time last year, however prices are down on what they were in January (-5.5 per cent) and November (-5.9 per cent), indicating the Reserve Bank's LVR restrictions are having an effect where they are not needed."

He said total listings last month were 297, down 25.6 per cent from the 399 of February last year, and sales were down 10 per cent from 263 last February and 236 this February.

However, the average price had increased 15 per cent, from $288,441 last year to $330,590 this year.

First National Mark Stevenson owner Mark Stevenson reported sales down 10 per cent from last year, caused by the Reserve Bank's loan value restrictions (LVRs). However, the volumes of house sales so far in 2014 were about 50 per cent up on the same time in 2012.

Mr Stevenson said the LVRs have had a "definite impact" on first-home buyers, but he believed this would diminish.

The Marlborough Express