Property market to stay flat while uncertainties remain

New Zealand property values rose 6.1% in the year through March, and the average sales price dropped to $407,133 from $416,074 in February, in a market that has become more cautious, QV said.

Spokeswoman Glenda Whitehead said the government's tax package that is expected to hit residential property investors, the prospect of rising interest rates from the middle of the year, and bank lending criteria were all still weighing on property owners' minds and this will continue until they have certainty.

"It's a mixture of all of these factors that are holding the market back," Whitehead told Landlords.co.nz. People are more willing to take longer to sell their properties and there is not an exodus from the market after the surge to join it a couple of years ago, she said.

"Property investment has become a household decision and people are going to wait until they get the value they want - if that takes 40 days to sell then so be it," she said.

Auckland house sales picked up last month, with Barfoot & Thompson, the city's largest real estate agency, recording a 48% jump in the number of sales from February. That came at a time when the property market seemed to be heading for a small slump as banks approved fewer mortgages and demand for new housing eased from last year's peak.

Whitehead said buyers are being more discerning, with "well-presented and appropriately priced" properties selling well.

In Auckland, property values increased 9.9% in a rolling three-month period ending March 31 from an 8.7% gain in February, while the average sale price dropped to $546,052 from $548,062.

In Wellington, values increased by 6.6% in the rolling three month period, from a 6.7% gain reported in February. The average sale price declined to $458,260 from $468,698.

Christchurch property values rose 6.9%, from the previous month's 6.9% gain, with the average sale price down to $374,117 from $380,925.

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