Property market hits plateau

Residential property vendors now face much more of a wait to find a buyer, figures from research firm myvalocity show.

Year-on-year, the number of new residential mortgage registrations dropped 21 per cent in September. Auckland had the biggest fall, down 26.2 per cent.

Other North Island centres were down 15.6 per cent on the equivalent period the year before. Wellington and South Island centres bucked the trend with growth in the number of mortgages issued of 2.8 per cent.

Myvalocity chief executive Carmen Vicelich said price and sales volume data had indicated the market was cooling, but mortgage registrations were another gauge of that.

‘‘Mortgage registrations are a good indicator of the financial performance of the market as it tracks the behaviour of all active buyers rather than just what is actually selling at the time,’’ she said.

‘‘The sharp decline in mortgage registrations is one of the most interesting trends we have seen for a while as despite good migration, record low interest rates and the price pressure that still exists in the property market, the num- ber of mortgage registrations has consistently declined in recent months.

‘‘This is something we have not seen before. The property market is, to some extent, seasonal and traditionally we expect to see a rise in mortgage registrations in spring, however this has not been the case so far this year.’’

Mortgage registrations peaked in October last year and then started to decline dramatically between December and March, her data shows.

The trend indicates the Reserve Bank’s additional loan-to-value restrictions and an ongoing lack of supply were having an impact, Vicelich said.

Broker John Bolton, of Squirrel, said house prices had been rising largely because of low interest rates, particularly outside Auckland.

In attempting to squash that, the Reserve Bank had stopped some parts of the market in their tracks.

‘‘They are stopping people selling and buying. There is a hell of a lot less activity in the market.’’

It was now harder to sell properties than it was as little as three or four months ago.

‘‘The Reserve Bank has not only stopped house price inflation but has taken a lot of the liquidity out of the market. I think that’s a bit dangerous.’’

Investor numbers in Auckland dropped 35.3 per cent compared to the same time last year, to 15.1 per cent of sales. But first-home buyers benefited, increasing in numbers by 4 per cent.