MARYANNE TWENTYMAN AND JAMES WEIR

Waikato house prices have dipped slightly in the past month – bucking a national trend that shows the average asking price for houses at a four-year high.

The latest New Zealand Property Report shows that in April, the average asking price of Waikato homes dropped 1 per cent to $352,016, while the national price hit a new high of $429,249 – just higher than the previous peak in late 2007, at the height of the housing market boom.

Bayley’s Real Estate agent Stephen Shale said there was plenty of confidence in the Waikato real estate market, especially at the higher end of sales, where rural and lifestyle properties were being shifted in high numbers.

“The sheer number of lower-priced homes that are moving tends to drag the median number down, and there are a lot of investors and first-home buyers who have reached that point where they don’t believe prices will get any cheaper and that there is no point in waiting any longer,” Mr Shale said.

The report shows that the number of new Waikato listings dropped 39 per cent in April, with 606 properties listed, compared with 994 in March.

But nationally, the country is swamped with high stocks of properties for sale, pointing strongly to a buyers’ market.

“And that new stock is definitely coming on at realistic prices,” Mr Shale said.

Bank economists say the housing market got some zing after the Reserve Bank cut official interest rates early in March, after the big Christchurch earthquake.

Floating mortgage rates dropped sharply, to about 5.75 per cent.

The report indicates that at present sales rates, it would take 54 weeks to clear all the homes now on the market, some of the highest levels ever recorded. That inventory level is well above the long-term average of 41 weeks, suggesting that buyers have the upper hand.

In April, new listings fell 7 per cent, with just under 11,000 new properties coming on to the market.

Inventory levels reached new peaks in Hawke’s Bay, Manawatu, Wanganui, Northland, Otago and Southland. The market sentiment in all regions, bar Auckland, was strongly in favour of buyers, the report shows, because of the high levels of stock on the market and slow sales turnover.

The Coromandel especially has been suffering under a “significant weight of inventory of unsold houses for many months”, the report says. Based on present sales rates, it would take a massive 264 weeks – more than five years – to clear all the properties on the market in the region.

Last week, Westpac Bank economists predicted that house prices were set to rise 4 per cent this year, with the market led by Auckland. But borrowers should expect floating mortgage rates to rise sharply over the next three years.

The drop in mortgage interest rates in March had added “zing” to the housing market, Westpac said, but floating rates would start rising early next year and would keep rising till 2014, pointing to flat prices in the longer term.

– Waikato Times

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