Houses pass $250,000 magic mark

Timaru house prices rose 3.8 per cent in February, with the average sale price breaking the $250,000 barrier.

Figures from Quotable Value showed house values across New Zealand in February increased 5.5 per cent on the same month a year ago.

The national average sales price increased to $416,074 in February, up from $409,807 in January.

In Timaru, house values jumped 5.3 per cent in the three months to the end of December compared with the same period in 2008. The average sale price in Timaru in February was $250,486, while the average sale price in January was $247,744  up from $244,461 in December.

Real Estate Institute South Canterbury representative Wardhwick Jones said he was surprised to hear Timaru's average sale price had climbed above $250,000.

There might have been a lower number of sales at higher prices, he said.

"You've got to take that figure into context. Buyers at the moment are being cautious."

Mr Jones said it was critical that sellers got the presentation and the price right, otherwise properties would sit on the market.

He thought a lot of buyers would be waiting to see what the Government announced in the May Budget before buying.

The Government has promised personal income tax cuts, although this may be offset by a rise in GST.

QV Valuations manager Glenda Whitehead said the continued increase in values masked what had happened in recent months.

She said values had grown in the main urban centres since mid-2009, but the rate of growth had recently begun to slow.

Growth in the provincial areas had slowed even more, she said.

"The market remains patchy and buyers cautious.

"Well presented, good quality properties are continuing to sell quickly and at healthy values, whereas those with less desirable attributes are proving hard to shift."

She said there was activity at the lower end of the market, driven mostly by first home buyers.

"Fewer investors are actively buying and some are selling their investment properties now rather than waiting for changes in property tax to be announced in the May Budget."

Banks would continue to take a cautious approach to lending with property valuations required where the borrower had a relatively low deposit.

"We expect values to stabilise over the coming months reflecting the ongoing uncertainty around economic factors such as employment, pending interest rate rises and continued tight lending criteria.

"We may see more certainty in the market after the May Budget announcement when personal tax cuts are known, changes to property taxation are specified, and interest rate changes are clearer."

Values in Auckland rose 9.5 per cent, Wellington  6.8 per cent and Christchurch 6.9 per cent in February.

- © Fairfax NZ News