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Stephen Johnston
Dunedin residential real estate values continued to
increase above national rates last month with southern Dunedin
showing the third-highest percentage increase in the country.
The residential price indices for January released by
Quotable Value New Zealand show that in the southern Dunedin
area there had been an annual increase of 9.6%.
Coastal North Shore (9.9%) and Manukau East (9.8%) were the
only areas with higher percentage growth in values.
This despite the expected national January jump in property
sales failing to eventuate.
Experts are suggesting the Government's potential tax changes
could be behind the slowdown.
QV said there were signs of uncertainty in the housing
market, mostly due to looming interest rate rises and the
recently announced recommendations to the tax working group.
The Victoria University-based group has suggested taxing
aspects of the property investment market.
It recommended taxing the unimproved value of property,
making changes to the treatment of rental properties, and
raising GST from 12.5% to 15%.
The Budget will be delivered on May 20 but New Zealanders are
expected to get some clues on the Government's thinking on
tax reform tomorrow when Prime Minister John Key sets out a
comprehensive policy agenda for the year as Parliament
reopens.
QV spokeswoman Glenda Whitehead said home-buyers remained
cautious in the face of proposed tax changes, which was just
one factor influencing a quiet start to the year.
"There is increasing debate around the likely impact of the
options put forward by the tax working group ... and while
tax changes implemented will impact, that change will be
alongside other market factors such as interest rates,
employment security, and bank lending policies prevalent at
the time any of those tax changes come into effect."
New Zealand Property Investors' Federation president Martin
Evans said investors were resisting purchases until the
specifics of the tax reforms were known.
"We're hoping the Government won't touch depreciation or
impose a 1% land tax.
But in the meantime, it's all up in the air, and people are
holding off buying.
Taxes are just another thing to consider on top of rates,
insurance, and mortgage rates."
Ms Whitehead said market activity in January was patchy, and
was driven by home owners, not investors.
"While it is normal for sales activity to be at its lowest
over the Christmas period, there is usually an increase in
listings activity in January leading into the busiest time of
the year in February and March.
This January the expected increase appears to be absent."
The average January sale price in southern Dunedin, which
takes in the area from Waverley to Green Island including St
Kilda and St Clair, was up by more than $3600 from December
to $268,302.
In Dunedin overall, the increase in values was 5%, above the
national average of 4.4%, and slightly above the 4.9% annual
growth reported in December.
The values were still almost 3% below the peak levels of July
2007.
The average sale price in Dunedin in January had increased
from $276,875 to $279,101.
Nationally, the average sale price is $409,807.
Within Dunedin, the highest average sale price was in the
central/northern city at $290,234, and the lowest in the
peninsula coastal area at $252,369, and the Taieri at
$283,267.
Real Estate Institute of New Zealand Otago branch president
Stephen Johnston said he expected the next month or two to
show a clearer direction.
"It's a bit hard to know which way it is going at the
moment."
In southern regional areas, Queenstown Lakes was the only one
to record a small increase in values (0.5%), with an average
sale price of $607,245.
Waitaki values dropped by 5.1% to average $202,673, Central
Otago 2.8% to $304,884, and Southland 5.1% to $194,614. -
Additional reporting, The New Zealand Herald
