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The Reserve Bank's contentious loan to value ratio (LVR) restrictions on bank lending appear to be biting into New Zealand home sales, especially in the targeted bracket of first-home buyers.
In the both the national entry level $400,000 bracket, and Dunedin's $300,000 bracket, sales are down markedly.
Overall national home sales in December- mainly in the lower $400,000 bracket - continued to decline, while the national median price again struck a new high, of $427,000.
There were 5688 homes sold in December, a 1.1% decline on a year ago, but compared to November sales numbers were down 18.3%, Real Estate Institute of New Zealand (REINZ) chief executive Helen O'Sullivan said.
Sales of homes below $400,000 in November were down 19% on a year earlier, and for the month of December, they were down 14.4% from a year earlier.
''This may be indicative of fewer sales in the lower price [$400,000] brackets since the imposition of the [Reserve Bank's] loan to value ratio restrictions, and a resulting relative uplift in the median price on some regions,'' Ms O'Sullivan said.
REINZ Otago spokeswoman Liz Nidd said in December 2012 64% of house sales were in the $300,000-or-less range, but last month that had fallen to 51%.
''There are less first-home buyers around,'' she said.
The Reserve Bank restricts mortgage lenders to having just 10% of their overall mortgage portfolio lent to people who have less than a 20% deposit.
Ms Nidd said historically a ''bulge'' of new listings was expected in Dunedin by early February, once parents had got children back to school and turned their attention to selling the family home.
Ms Nidd said the decline of $300,000 sales altered Dunedin's overall median price, which rose from $278,500 in November to $294,500.
She noted a massive increase in Dunedin section sales, from 14 and eight in October and November respectively, to 54 in December, but 40 of those were a Gladstone Rd subdivision near Mosgiel.
Overall Otago sales were down from 231 a year ago to 212, while the median price for December rose 2.2% from $247,500 to $253,000.
For the separate Central Otago Lakes region, sales numbers increased slightly from 103 to 110 for December and the median price rose from $450,000 to $461,500.
Queenstown had a sales decline from 55 to 52 for December anda larger 9.6% price decline, from $568,000 a year ago to $513,000.
Westpac economist Dominick Stephens said there was '' now no doubt'' that New Zealand's housing market was slowing.
''The slowdown has hit low-price houses especially hard, indicating that the Reserve Bank's mortgage lending restrictions are having an impact, as are rising mortgage rates,'' Mr Stephens said.
House prices tended to follow sales, with a lag of a few months, and Mr Stephens expected house price inflation to ''begin cooling a month or two from now''.
'' We are forecasting 6.5% house price inflation for 2014, down from almost 10% in 2013,'' he said.
The number of house sales per month fell 11% during the three months to December.
In seasonally adjusted terms, it was the sharpest decline in house sales since 2009.
''Lower turnover is one classic indicator of a market slowdown. It seems sellers are reluctant to put their houses on the market in the current uncertain environment,'' Mr Stephens said.
ASB economist Daniel Smith said sales volumes dropped sharply in November.
''So sales are still down from where they were before the LVR restrictions came into effect. That suggests some impact on demand,'' he said.