Region's property values stagnate
Property values are flattening around the region as a combination of lending restrictions, interest rate increases and the annual winter seasonal slowdown start to bite, Quotable Value says.
The QV Residential Price Movement Index for May, released yesterday shows that while property values in Nelson City are still above the previous peak in 2007, there has been little movement in the past three months.
Nationwide residential property values for June have increased 8 per cent over the past year, and 2.1 per cent over the past three months.
Values in Nelson City have increased by 0.2 per cent in the past three months, 1.7 per cent since June last year and are 4.6 per cent above the previous peak of 2007.
Property values in Tasman District have decreased 1.4 per cent over the past three months but they have increased 2.1 per cent year on the year and they are 2.2 per cent above 2007 levels.
QV registered valuer Richard Kolff of Nelson said it appeared that the elements around lending plus the traditionally quiet winter period were keeping the market quiet and values static.
"Sales activity is down reflecting the national trend of a lower number of mortgage applications and sales," Kolff said.
"Although there is not a high rate of migration to the city in general, we are noticing a trend of retirees moving to Nelson and renting, and also retirees from Nelson, selling their home and choosing to live off the capital and rent, rather than buy another property."
He said it was possibly higher interest rates that had made it more attractive to invest the proceeds of a house sale with the bank, which would top up other income.
Kolff said it was a trend based on discussions with property managers who had noticed that retirees were selling up large family homes and instead of tying up around $300,000 on a townhouse they were living off all the funds from a house sale and renting.
Tasman District is showing a slight downward trend this month and this market remains steady, but relatively quiet."
QV national spokesperson Andrew Rush said the nationwide index was still increasing but the picture around the country was mixed.
"Residential property values in Auckland and Christchurch are still increasing at a similar rate to what they were in June last year."
The Auckland market has increased 12.3 per cent year on year and values were up 31.4 per cent since 2007.
Property values in Christchurch city have increased 2.5 per cent over the past three months, 7 per cent year on year and 21.1 per cent since the peak of 2007.
Southwest Christchurch has seen the largest increase in values with values there increasing 3.5 per cent over the past three months, QV said.
The Nelson Mail