The introduction of LVRs may have created uncertainty for
both buyers and sellers. Photo by Gerard O'Brien.
January house prices continued to rise on a year ago, but
the number of homes sold priced under $400,000 - which make up
55% of the market - declined.
It appears to provide evidence the Reserve Bank's loan to
value ratio (LVR), placing lending limits on banks to
first-home owners with less than a 20% deposit, is beginning
to take effect.
ASB economist Daniel Smith said sales volumes during
Nov-ember and December were low.
''It seems that the introduction of the LVR restrictions in
October may have created hesitation among both buyers and
sellers,'' Mr Smith said in a statement.
He said sales in the lower-priced segment of the market had
initially been most affected by the LVR restrictions, but the
January data suggested the impact was lessening.
While the national median price was down 5.8%, or $25,000 to
$402,000 from the previous year, Otago's median price was up
10.9% to $234,000, while the separate Central Otago Lakes
region was up slightly, 0.5%, to $425,000, data from the Real
Estate Institute of New Zealand (REINZ) showed yesterday.
The only decline in sales numbers was the under-$400,000
bracket, down 15% from 2756 a year ago to 2326, while
$400,000-$600,000 sales (26% of market) were up 4% at 1350
and $600,000 to $1 million (14% of market) sales were up 15%
Sales of homes above $1 million (3.4% of market) increased
33% from 167 a year ago to 222.
REINZ chief executive Helen O'Sullivan said the overall 4719
January sales numbers were down 17% compared to December, and
4.3% on sales the previous January.
Several issues, including seasonal factors and the ongoing
LVR impact, meant it was difficult to get an entirely clear
steer on the direction of the January market.
Mr Smith said despite the slight easing in housing market
pressures, a hike of the interest-driving official cash rate
by the Reserve Bank still looked like ''a near certainty''.
In Dunedin, median prices on a year ago rose from $249,000 to
$273,000, while Queenstown dipped from $562,500 a year ago to
- New Zealand's total value of residential sales, including
sections, was $2.33 billion in January, compared to $2.24
billion a year earlier.