Loan measures hit real estate

Buyers looking for houses now face a lot less competition than they had at the same time last year, as property rises grind to a halt in many parts of the country.

Statistics from QV for June confirm a fall in sales volumes, particularly in Auckland, where the number of sales is now 30 per cent lower than it was this time last year.

At the same time, price rises have vanished: Across the Auckland region, values have not changed over the past three months.

Values decreased in the Auckland City apartment market and around west, east and south Auckland. Excluding the city’s islands, Rodney-north had the biggest price increase over the quarter, up 2.2 per cent.

It comes after Real Estate Institute data showed the number of sales in May was down 27.5 per cent in Auckland compared to the year before, and 13.6 per cent across the rest of the country. QV reports are based on settled sales, whereas Real Estate Institute data is gathered from unconditional deals.

QV’S figures show Auckland prices are now rising at their slowest annual rate since September 2012, with an average value of $1.045 million.

Spokeswoman Andrea Rush said the slowdown in Auckland was due to high prices combined with banks’ stricter lending criteria making it harder for anyone to buy who was not a cash buyer, or did not have high levels of equity.

‘‘It has also become much more difficult for developers to gain finance to build new homes, which is now leading to a slowdown in building activity in the market,’’ Rush said.

‘‘The Corelogic Buyer classification data shows the share of sales to all buyers requiring a mortgage has dropped and the share of sales to cash buyers remains steady.’’

Auckland homevalue manager James Steele said there were opportunities for first-home buyers in some areas, but also reports of deals falling over as buyers found it increasingly difficult to get loans. Wellington is also slowing. There, price rises have dropped from a rate of 5 per cent or 6 per cent a quarter to 2.4 per cent over the past three months. The average value is now $609,552.

‘‘First-home buyers remain active in the market and wellpresented and well located properties are still selling well and are generally achieving strong prices,’’ said registered valuer David Cornford.

‘‘However, properties with undesirable characteristics are taking longer to sell and buyers appear to be adopting a more cautious approach regarding their purchasing decisions and they are in less of a hurry compared to 12 months ago.

‘‘New listings and overall listings are up compared to the same time last year and the number of days it’s taking properties to sell has also risen.

‘‘When you add to this the fact that sales volumes are lower compared to the same time last year and the rate of value growth has eased back, we can confirm we are now seeing an overall slowing in the market.’’

Hamilton values are rising again after a period of decline earlier in the year.

Valuer Stephen Hare said sales volumes had picked up but the average time it took to sell had increased, which gave buyers more chance to negotiate.

‘‘With the heat now having come out of the market clearance rates have fallen at auctions, however properties continue to see multi offers and many are still selling above the asking prices,’’ he said.

‘‘In turn, listing prices or negotiations are becoming the

"We are now seeing an overall slowing in the market." Registered valuer David Cornford

more desirable option with people less inclined to take risk auctioning in the current market.

‘‘The drop-off in the number of investors at the entry level of the market has created more opportunities for first-home buyers, who were previously getting beaten when vying for properties.’’

In Christchurch, property prices are flat, down 0.1 per cent over three months and up 1.1 per cent over the year.

‘‘It appears there is less optimism and confidence in where values are going in the market currently and it’s not only taking longer to sell property here but it’s also harder to buy with banks being stricter with their lending criteria,’’ said valuer Daryl Taggart.

Rush said regional centres were showing the strongest growth as buyers looked for more affordable options.

Hastings had the strongest price growth in the year to June, at 21.6 per cent. It was followed by Rotorua at 20.2 per cent and Whangarei at 19.6 per cent. All three centres still have an average value of less than $500,000.