House sales defy value drop

The number of new Rototrua listings in March was the lowest for March since 2009

Rotorua residents are continuing to move around despite records showing a slight decrease in home values, a real estate agent says.

The March residential price movement index from QV showed Rotorua home values dropped 3.1 per cent year-on-year to an average of $268,628. This was a small decrease on the past three months and 8.5 per cent below the previous market peak of 2007.

Ian McDowell, managing director of McDowell Professionals, said he wouldn't give too much weight to the figures.

"Our sales were quite good in March," he said. "There's been a lot of multiple-offer properties.

"Not many properties go to auction in Rotorua but a lot have been going to tender."

Out-of-town buyers were increasingly showing interest in Rotorua, he said.

"The market used to be dominated with internal movement in Rotorua. Now we're getting a lot of people from out of town, particularly from Auckland."

Mr McDowell said he hadn't yet seen a surge in first-home buyer interest following April 1 changes to Kiwisaver lending. "Hopefully that'll come in the coming months."

Nationally, residential property values increased 2.8 per cent over the past three months and 7.7 per cent year-on-year.

This put values 21.3 per cent above 2007. According to realestate.co.nz, the average asking price of a home in March reached a new high of $514,712. It was the third consecutive month of record asking prices.

The number of new listings in March was the lowest for March since 2009, however.

QV national spokeswoman Andrea Rush said it would be interesting to see whether changes to lending for first-home buyers affected values.

"The Government's new Homestart policy may lead to increased activity among first-home buyers around the country and it will remain to be seen whether this has an impact on values," she said.

"The Reserve Bank is considering tighter rules on borrowing to property investors, which it has said may now be defined as those who own more than one property and thus could cover any property the owner does not live in.

"Currently close to 40 per cent of all residential house sales in New Zealand are purchased by those who own two or more properties and the Reserve Bank's changes could come into effect as early as July 1 this year."