Market tough to buy second home

Don't cry for first home buyers - it's second home buyers who have it tough in the current market, a local property expert says.

Leaders managing director Elanor MacDonald said it was difficult for second home buyers who had bought their first home before loan-to-value ratio restrictions came into effect to move up the property ladder.

"If they bought their first home five years ago, they would have been able to get it on a five or 10 per cent deposit," she said.

"Over that time, their equity wouldn't have necessarily increased so they won't necessarily have the 20 per cent they need to get into their second home."

A perception that it was difficult for first home buyers to get into the market still existed, but Ms MacDonald was unsure if it was a reality.

"We're seeing good sales in the $200,000 to $300,000 bracket, with 24 in Hastings last month and 26 in Napier. A good portion of those were first home buyers."

However, a shortage of listings as a result of second home buyers not moving on meant competition for houses at the lower end of the market could still be stiff, she said.

Capital growth and time would correct the situation, she said.

In Hastings, five properties over $700,000 were sold in November, which had skewed the month's median house value, she said.

The median Hastings house sale was $299,100 in November - a $31,600 increase from the same time last year, according to the Real Estate Institute of New Zealand's (REINZ) latest figures.

In Napier, the median house sale was $308,500 in November, down $5250 from the year prior according to the institute's latest figures.

Median house prices and the number of houses sold were higher than in October in both cities.

House sales were also up in both cities from October. In Hastings, they were up on the previous year but in Napier there was no change to the number of residential properties sold.

"I would call the high-end sales in the Hastings market a spike rather than a trend," Ms MacDonald said. "Not much in regards to house values and sales has changed from last year really."

The QV Residential Price Movement Index released yesterday showed Napier's home values increased by 1.1 per cent during the past three months, being 1.9 per cent higher than last year while Hastings' values decreased by 1.4 per cent in the past three months, being 1.7 per cent lower than last year.

Some of the high-end Hastings properties that sold had been on the market for a long time, said Ms McDonald.

Interest from Auckland and Wellington buyers and post-election confidence had perhaps contributed to their sales, she said.

Nationally, the median house price rose $25,750 from October and $30,750 from November 2013 to $455,750.

REINZ chief executive Helen O'Sullivan said the November data showed buoyancy returning to parts of the market.

"Commentary from around the regions suggests the 'top end' of a number of regional markets are performing well," she said. "Those dwellings in the lower deciles are seeing less price growth and a lack of buyer capacity which may be related to the [loan-to-value ratio] restrictions currently in place."

QV registered valuer Bevan Pickett said there was an air of optimism in some sectors of the property market.

"There has been an influx of new listings in most price brackets".

Looking rurally, Mr Pickett acknowledged the "rural properties with good characteristics are seeing some positive movement in values in the region".

"There is a general feeling of optimism in the rural property sector".