Record high property prices in the Bay of Plenty coupled with new lending restrictions are causing a wave of uncertainty in the property market with sales dipping four per cent from September.

Data released by the Real Estate Institute of New Zealand show property prices in the Waikato/Bay of Plenty region hit a five year high of $335,000 last month, up 7.4 per cent from October 2012.

October recorded a five year record high for property prices in the Bay.

Tauranga City's median price rose from $340,000 in September to $365,000 last month, with Mount Maunganui/Papamoa shifting from $420,000 to $444,500.

The national median price also increased by $7525 to $407,525 compared to September – a new record median high. A total 6778 dwellings were sold nationwide, increasing a mere 0.9 per cent from September.

REINZ attribute the drop in sales volumes in October to new Reserve Bank limits on low deposit lending.

REINZ regional director Philip Searle says regional reports are showing a noticeable fall off in interest from first home buyers, with investors taking advantage of less competition to acquire properties.

Compared to September, sales fell by four per cent with only Rotorua and Mount Maunganui/Papamoa seeing an increase and a number of areas experiencing significant falls in sales volume.

In Tauranga 121 properties were sold in October compared to September's 137 while the Mount/Papamoa increased by one from 79 to 80.

'Listings continue to be an issue, despite the recent spring surge and vendor expectations continue to rise.”

REINZ chief executive Helen O'Sullivan says real estate sales volumes eased back in October following the lending restrictions with agent comments indicating heightened levels of uncertainty for both vendors and purchasers.

She says this is causing a number of prospective buyers and sellers to hold off from committing to the market until they are more comfortable.

'Typically in the real estate market sales volumes change more quickly than prices, and overall sales volumes are lower than what we would expect for this time of the year, although in a few regional centres sales are strong.

'The full effect on new prices of the new LVR restrictions may not show up in the national or regional medians for a few months as buyers with pre-approvals make their purchases and the market adjusts to these conditions.”