House buyers cautious

Nelson and Tasman property prices are rising but increasing mortgage rates, unemployment and property tax changes are making buyers cautious, Quotable Value says.

The valuation firm's January statistics, released today, show property values rose 4.4 per cent nationally compared to the same time last year, while Nelson's went up 3.6 per cent and Tasman's 4.9 per cent. The average sale price in Tasman was $365,540 and Nelson's was $340,782, against a national average of $409,807.

QV valuer Geoff Butterworth said the region's sale prices were "steady" with the strongest demand still being in the "price accessible" bracket of up to $350,000.

"Despite the claim the economic recession is over, some caution remains with increasing interest rates and unemployment. Existing and potential new residential property investors may be more tentative with potential tax changes to property being mooted."

QV has noted that sales, particularly in the main centres, are being driven by existing home owners and first-time buyers rather than investors.

Mr Butterworth said the number of property sales in Nelson-Tasman remained low but people were still coming out of holiday mode in January.

"Sales listings have increased in recent months providing a better balance between supply and demand. A number of section sales in the second half of 2009 has fed through to a number of new homes built and under construction."

QV spokeswoman Glenda Whitehead said sales nationally usually tended to be at their lowest over Christmas but listings increased in January, leading into the busiest time of the year in February and March. "This January the expected increase appears to be absent."

This could be because of more people being forced to take leave at Christmas and only recently returning from holidays, she said.

"There are also signs of increasing indecision in the market." Buyers were taking a "cautious approach" and doing their research thoroughly, she said.

"Some of the frantic market activity of 2009 when there were multiple buyers competing for a property appears to have eased."

It was still too early in the year to conclude what the likely pace of the market would be, she said.

Values in the Auckland region are up 7.3 per cent up, Wellington 5.7 per cent, and Christchurch 6.3 per cent up.

- © Fairfax NZ News

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