Bay house values still in doldrums

Measures to rein in Auckland prices are hitting Hawke's Bay, experts say. Photo / Glenn Taylor

A survey of property values shows Bay house prices continue to languish, as measures to rein in bigger markets bite down on the provinces.

The new QV values are a quarterly analysis of North Island property values that give price data for 420 suburbs.

Most of the areas analysed in Hawke's Bay showed slight decreases in average house prices or went unchanged.

In the year to June 30, Maraenui's average property value, which was measured at $137,750 on July 31, decreased by 10.2 per cent, and by 7 per cent in the three months to June 30.

The Hastings suburbs of Flaxmere, Havelock North and the Central Hawke's Bay town of Dannevirke also saw a drop in average house prices.

There were modest increases for the Napier suburbs of Bluff Hill, Taradale and Greenmeadows.

Hawke's Bay Chamber of Commerce acting chief executive Graeme Norton said the region's small housing market was prone to fluctuations.

"It depends on what houses have been bought and sold in that particular area at that particular time."

He said stagnant house prices were a reflection of the provincial economic climate.

"I'm not surprised that our house prices are relatively flat. People are just getting by, and house prices are a reflection of that.

"If house prices are relatively neutral, that's not necessarily a bad thing," he said.

TelferYoung property valuer and chairman of the Hawke's Bay branch of the Property Institute of New Zealand, Trevor Kitchin, blamed a combination of factors, including loan-to-value rations (LVRs), increased interest rates and buyer uncertainty ahead of the election.

"Certainly at the moment there's no drivers in the market to push prices on, demand is limited and volumes have been coming down.

"It's just gone a little bit quiet in the winter but long-term I wouldn't expect that trend to continue."

The introduction of tougher LVRs in November had hurt the provinces, Mr Kitchin said.

"It's just not helping our local market.

"We didn't need anything to dampen down the market, it was for Auckland and Canterbury."

Tremain Real Estate managing director Simon Tremain said there was a lack of capital and population growth in the region, but there was still a "good spread" of demand for housing.

"LVRs have certainly stopped the lower end [of the market], but we've got pretty good demand in the mid to high end.

"There's activity at all levels.

"Usually, you've got more activity in the lower end but at the moment we have pretty steady demand across the board."