18 Jan 2012

2012 could be year for property investors

3:42 pm on 18 January 2012

The head of the Property Investors Federation says 2012 could be the year when investors dip their toes back into the market, but is not anticipating a return to the boom times of the early to mid-2000s.

Property is showing renewed signs of life, with new figures from the Real Estate Institute on Wednesday showing the best December for house sales in New Zealand in four years.

Some 5300 houses changed hands in the final month of last year. The institute says 900 more houses were sold during December than the same month a year ago.

House prices, once adjusted for house size and quality, rose 3.1% compared with December 2010.

The median price rose nearly 1% to $355,000 over the same period. Overall, prices are still 2.4% below the 2007 peak but in Auckland are now 1.3% above their all-time high reached in July 2007.

Property Investors Federation president Andrew King says the market continues to be dominated by first-home buyers.

He says professional investors have been buying for the past year but 2012 could be the year part-timers come back into the market.

Mr King says low interest rates and good prospects for rents could lure investors back.

Real Estate Institute chief executive Helen O'Sullivan says a shortage of houses is bolstering prices and expects them to also rise by about 3% this year.

Separately, the online marketplace Trade Me says rental listings fell 6% in the final three months of last year compared with the same time year ago. However, demand from renters rose 13%.