Prices drop as it gets colder
House prices are heading south in some parts of the Waikato as lending restrictions start to bite.
The South Waikato district housing market has seen its biggest drop in house prices since the start of the year.
Quotable Value Ltd ( QV) figures for June show that prices have dropped 4.4 per cent in the past three months, and are 1.6 per cent lower than they were at the same time last year.
But Harveys Tokoroa salesman Ben Johnson said those numbers are nothing to fret about.
‘‘If it was 4.4 per cent on the Auckland market it would be a different story. With the prices here I wouldn’t call 4.4 per cent a slump I would just call it normal really.’’
He said traditionally prices drop when the temperature does.
‘‘ Traditionally the winter months aren’t as busy as say spring and summer.’’
They have dropped a whopping 23.2 per cent since the housing market peaked in 2007.
Johnson said it is hard to compare the two time periods.
‘‘ I think that was a higly inflated market and you know it’s kind of come back down from there.’’
QV Valuer Nicky Harris said the number of houses swapping hands had pulled back thanks to the loan-to-value ratios (LVRs) introduced by the Reserve Bank in October last year. The restrictions require a deposit of at least 20 per cent before banks can approve lending.
‘‘In many parts of the wider Waikato region many smaller towns are seeing decreases in value having been hit hard by the LVR (loan-to-value ratios) speed limits which have slowed activity and are driving values down,’’ Harris said.
Johnson said most South Waikato buyers are meeting the market with prices.
‘‘I guess the thing about it is they know the market pretty well as well.’’
Stephen Eagle was one vendor forced to lower his expectations.
Eagle said it took two years to sell his two storied, four bedroomed home.
It was on the market for $180,000 and after a price drop in June he sold it for $158,000.
‘‘ Ben [ Johnson] tried everything,’’ he said.
But the low prices worked both ways for the resident who arrived in Tokoroa in 1969.
He is moving into a town house which he snatched up in a mortgagee sale for $44,000 – close to half the price it was listed for.
He said what goes around comes around, people just need to ‘‘hang in there’’ and something will crop up.
‘‘ There’s some bloody nice houses for sale at the moment.’’
Fine work: Olivia MacPherson,12, took out the junior section of the GoBake cake decorating competition with her picnic design.