First-home buyers hold off, says agent

Timaru's property market appears to have slowed down slightly in the leadup to summer, with an agent saying first-home buyers are holding off.

The Real Estate Institute of New Zealand's (REINZ) latest survey revealed Timaru's median sale price for last month was $260,000, about 9 per cent higher than last year. However, the sales volume has dropped to 58 for last month, compared with 76 for November 2012.

Professionals Real Estate agent Carl Slade said the sales appeared to be tracking at a "reasonable rate", but he had seen a drop in inquiries from first-time buyers.

New rules by the Reserve Bank put restrictions on home buyers who cannot provide a minimum deposit of 20 per cent of a property's value.

"There are still plenty of opportunities for first-time buyers in Timaru, but many might be holding off until they have enough money saved," Mr Slade said.

"I think we're still seeing strong interest in the investment property market. Property is a ‘mum and dad' type investment. You can purchase a home, set it up as a rental and gather money that way."

Mr Slade said it would be a "waiting game" on whether the changes to the Loan to Value Ratio would have a long-term effect in Timaru.

"If you look back at the last few years, I don't think there's been a massive fluctuation in Timaru."

Reinz chief executive Helen O'Sullivan said there were 991 homes sold in Timaru in the year ending November. That represents a 2.3 per cent drop in sales from the same period last year.

"We're very much seeing a two-step market nationwide. The market is bursting in Auckland and Christchurch - due to population growth in the former, and the earthquake rebuild in the latter - everywhere else it's lulling along," she said.

"This poses both opportunities and risks to the regions. There might be a period where housing in the provinces suddenly becomes a lot more appealing, but we could also see the population flight to Auckland continue."

The Timaru Herald