New Zealand property investors are procrastinating ahead of this month's budget as they wait for more clarity on what will happen to the tax treatment on housing.
QV Valuations flagged uncertainty around what will be in the budget for property investors as one of the reasons for the subdued market last month. Property values rose 6.1% in the 12 months through April while the average sales price for the three months ended April 30 fell to $405,235 from $407,133. Values were 3.9% below the market peak in late 2007.
"The great procrastinators have taken over at the moment and are awaiting further evidence confirming what's happening in the budget," QV spokeswoman Glenda Whitehead told Landlords.co.nz.
The government has flagged tax on property investment as an area that it wants to address, and has signalled it's considering cutting investors' ability to claim depreciation on buildings.
Whitehead said market activity in the coming months will rely on what comes out of the Budget and if confidence returns, the winter months could see a pick-up. Still, this could be tempered by interest rate hikes by the Reserve Bank, which is getting closer to returning the Official Cash Rate to more normal levels.
Auckland house sales slumped 28% last month with the average sales price down 1%, according to Barfoot & Thompson, the city's biggest real estate firm. The pick-up in the housing market has been tempered by caution with the number mortgage approvals sinking 7.4% in the 12 months ended April, compared to the same period a year earlier, according to central bank data.
Whitehead said the property market was "very mixed" with some areas showing good growth, while others reported falling values.
In Auckland, property values increased 9.5% in a rolling three-month period ending April 30 from a 9.9% gain in March, while the average sale price dropped to $532,538 from $546,052.
In Wellington, values increased by 7.1% in the rolling three month period, from a 6.6% gain reported in March. The average sale price rose to $460,365 from $458,260.
Christchurch property values rose 6.9%, from the previous month's 6.9% gain, with the average sale price down to $367,688 from $374,117.
Source: Landlords.co.nzcomments powered by Disqus