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Property investors still sitting on their hands

Property investors are still "sitting on their hands" in the wake of the government's Budget, as values continued to ease last month.

Monday, July 12th 2010, 12:00AM 1 Comment

by The Landlord

Sales activity has been subdued since the government introduced tougher tax treatment of property investment, as property values slipped back in June, according to QV Valuations data.

Property values were 5.2% higher than the same month in 2009, retreating from the year-on-year gain of 5.6% in May. That's the second time since March 2009 that the increase has lagged behind the previous month. Values are now 4.3% below their peak in late 2007.

"After we got closer to the peak, a lot of people are sitting on their hands" as they weigh up what to do next, said Glenda Whitehead, QV spokeswoman.

"We haven't had a rush of investors getting out of the market" with listings down and sales activity 20% below the long-term average, she said.

Whitehead said the housing market was probably indicative of the more downbeat mood among commentators on the wider economy, after recent data showed firms were less optimistic about the outlook of the country's economy.

The tax changes didn't seem to be changing behaviour too much, with activity largely unchanged from the lead-up to the government budget, and if people were to alter their behaviour, it would be over the next 12 months, Whitehead said.  

"Buyers continue to be very cautious and selective in their purchasing decisions," Whitehead said.

"There are still sellers who have unrealistic price expectations in the face of present slow market conditions."

The data comes after Auckland's biggest real estate agent Barfoot & Thompson reported a 16% slump in sales last month, as winter deterred people from looking for new property. House prices are forecast to fall at an annual rate of 2% for the next two years, according to Westpac research, after the government clamped down tax treatment for property investment.

The national average sales price rose to $404,715 from $403,070, due to a change in the make-up of sales taking place, which QV said shows the unreliability of using sales prices to measure value.

To find out what's happening in the main urban areas, click here.

« Momentum building in house market, according to ANZFree Investment Property Showcase Events: Auckland, Wellington and Christchurch »

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Comments from our readers

On 12 July 2010 at 10:51 am Christopher said:
You guys at Landlords need to get over the budget - the comments from Glenda Whitehead are the opposite of what you are claiming.
Commenting is closed

 

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 6.79 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 6.79 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.24 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.84 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 ▼6.79 ▼6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 ▼7.29 ▼7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 ▼6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 ▼7.39 ▼7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.30 7.89 7.69
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.30 8.89 8.69
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 7.45 7.25
SBS Bank Special - 7.24 6.85 6.65
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 ▼6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 7.15 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.29 7.32 6.65

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