Tight loan rules pushing prices up

Bay of Plenty Harcourts Advantage managing director Simon Martin said the figures did not reflect the number of properties sold. Photo / Joel Ford

Tauranga property values are on the rise, however estate agents say it is a direct result of lending restrictions.

QV figures released yesterday show residential property values increased 2.1 per cent in the past three months and 4.8 per cent across the year to April to an average value of $449,331.

Property values in the Western Bay of Plenty also increased by 2.6 per cent over the past three months and 4.2 per cent across the year. The average price of a property remained cheaper in the Western Bay at an average of $412,729.

Residential property values nationwide had increased 8.4 per cent over the past year, but values increased only by 0.2 per cent over the past three months to an average of $468,383.

Tauranga Realty Services chief executive Ross Stanway said the latest figures confirmed Tauranga's property market was stable.

"It is consistent with what we have seen over the past 12 months. But, based on these figures, has the Reserve Bank's LVR done anything to stem house prices? These stats show they haven't."

Bay of Plenty Harcourts Advantage managing director Simon Martin said the figures did not reflect the number of properties sold.

"The bottom end of the market has slowed down so the sales in the other price brackets push up the average sale price."

There was not an increase in demand for properties, he said.

"This is something we would expect when there's less sales in the lower price bracket."

Mr Martin said it was difficult to say whether the drop in house sales at the lower end of the market was driving down prices in that bracket.

LJ Hooker Tauranga franchise owner Neville Falconer said the property market in Tauranga was healthy.

Buyers had been cautious in the past couple of months and there had been some buyer resistance to increasing prices.

QV spokeswoman Andrea Rush said property values took a downward turn last month and predictions were this would level out but instead the trend showed values were starting to increase again.

"The nationwide index for April shows values accelerating at a similar rate to last year," Ms Rush said.

Values

Tauranga:
$449,331 (average current value);
4.8pc (12 month change);
2.1pc (3 month change)

Western Bay:
$412,729 (average current value);
4.2pc (12 month change);
2.6pc (3 month change)