Dunedin sales volumes below $400,000 hard hit; pictured is
an Andersons Bay house in Dunedin yesterday. Photo by Peter
The impact of the Reserve Bank's loan-to-value ratio
(LVR) restrictions on banks' mortgage lending may be beginning
to bite, judging by figures of national sales of homes below
$400,000 down 20% on November last year.
Despite matching the decline in overall sales, Queenstown's
median price leapt more than a third on last year's, to
$642,500, while Dunedin house sales below the $400,000 range
have plunged more than 30%.
Queenstown is well ahead of Auckland's median $620,000, but
many suburbs in the City of Sails overshadowed the southern
Mount Eden, Devonport and the eastern suburbs all had medians
over $1 million, the Real Estate Institute of New Zealand's
November sales data said yesterday.
More than $541 million was spent in November on homes valued
over $1 million, a 138% increase on the 227
million-dollar-plus homes sold in November 2011.
The LVR, which restricts banks from having more than 10% of
their overall loan book with people with less than a 20%
deposit, came into force on October 1.
Housing data since then may have been skewed by boosted
spring-time listings and the use of pre-approved loans.
ASB economist Daniel Smith said the data provided some
''further evidence'' the LVR restrictions might be slowing
house sales volumes.
''However, the housing market remains very tight, which is
maintaining upward pressure on house prices,'' he said.
Otago REINZ spokeswoman Liz Nidd said, when contacted,
Dunedin's sales volume had taken ''quite a chop'' from
November last year, down 31% from 270 homes to 186. LVR
restrictions were affecting not only first-home, but
''They [Reserve Bank] have achieved their ends if they wanted
to reduce volumes, but has it really taken the heat out of
prices?'' Ms Nidd asked, citing Auckland's $80,000 house
price gain to $620,000.
She highlighted overall Dunedin sales down, especially in
both the $200,000-$300,000 and $300,000-$400,000 brackets.
November 2012 sales totalled $84 million for the city. That
was $56.5 million last month.
For buyers to remain outside the LVR restrictions, an Otago
buyer at the median price ($242,000) requires a more than
$48,400 deposit, Dunedin ($278,500) a $55,700 deposit and in
Queenstown ($642,500) a deposit of more than $128,500.
''They [deposits] are significant. The LVR [restrictions]
have raised the bar for first, and also second-home buyers.
"They're asking parents for money or staying renting for two
years,'' Ms Nidd said.
Overall, house sales around the country were down 6.6% to
6961, when comparing November last year with last month, but
a new median high price of $425,000 was struck, the REINZ
REINZ chief executive Helen O'Sullivan said the small,
national, 2.7% sales increase, from October to November, was
weaker than expected and well below the 10% average over the
previous 10 years' data.
''The restrictions on high LVR lending may well be a driver
of the softer sales figures, with sales below $400,000
falling almost 20% compared with November last year,'' she
said in a statement.
Together, the regions of Auckland and Canterbury-Westland
accounted for 85% of the median price increase, compared with
November last year.
Around Otago, sales volumes compared with a year ago were
down almost 27%, from 351 to 257, while the median price fell
by 6.2%, or $16,000, from $258,000 to $242,000.
Ms O'Sullivan said Otago agents had reported there to be
fewer first home buyers in the market, and while listing
numbers were rising, vendor expectations in some places were
higher than the market.
In the separate Central Otago Lakes region, sales volumes
fell 5.6% from November last year, from 124 to 117 and the
median price rose 15.3% from $425,000 to $490,000 - the
second highest in the country after Taranaki and just ahead
of Auckland's percentage gain.
In usually buoyant Queenstown, sales were down a third from
60 to 40, but the sub-region booked a massive annual median
price gain of 34.8%, from $476,500 to $642,500.
Agents reported ''definitely fewer'' first-home buyers, Ms
O'Sullivan said, and while there was ''good interest'' from
investors, they were ''quite firm'' on value expectations.
New Zealand November total sales - $3.73 billion
Central Otago Lakes sales - $81.4 million
Otago sales - $71.3 million (Dunedin $56.5 million)