The Reserve Bank's loan to valuation ratio (LVR) residential mortgage lending restrictions continue to have a dampening effect on provincial property markets, according to the country's largest real estate agency.
Harcourts chief executive Hayden Duncan said the level of sales activity in regional centres pointed to the negative impact of the LVR restrictions in what he described as "fragile markets."
"Written sales are down across the board in the Central North Island, Wellington and South Island provincial regions however prices remain slightly higher," he said.
"This indicates it is buyers at the lower end of the market who are unable to make a purchase.
"In Auckland sales are also down, but for different reasons.
"A continued lack of new construction, combined with a growing population, is leading to a hesitancy among vendors to sell, for fear they will not be able to buy a suitable property elsewhere.
"In Christchurch it is a similar story, however there is hope on the horizon. Residential construction and new builds are ramping up and this will soon lead to more choice for buyers," he said.
Harcourts sold 1,598 homes throughout the country last month, down 230, or 13%, from 1,828 in July last year.
The average selling price in its Auckland/Northland region was $665,236, up $29,900, or 5%, from $635,336 in July last year.
In the Wellington region the average selling price was $362,171 compared with $354,522 in July last year.
In Christchurch the average selling price was $491,688 compared with $453,944 in July last year.
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