Property values increase as market settles

The New Zealand property market continues to stabilise, with figures released this month showing a further improvement in house prices, property valuer QV said recently. 

QV’s national residential property indices for June show a 7.1 per cent decline in property values over the last year. This is a further improvement on the 8.1 per cent annual decline reported last month.

Two thirds of the 7.1 per cent decline over the past year occurred between July and October 2008. Further slight declines continued through until April 2009, and since then values have increased slightly.

Over the past quarter, nationwide values have increased 0.4 per cent based on the index
compared to the previous quarter, when values fell 2.1 per cent.

The national average sale price also increased to $378,535 in June from $371,555 in May.

QV Valuation Manager Glenda Whitehead said that the volume of sales is approaching more normal levels, and the market is more stable.

“Decreases in property values over the past eighteen months combined with historically low mortgage interest rates have led to improved optimism and encouraged more buyers back into the market”, Ms Whitehead said.

“There appears to be a general shortage of properties for sale across the country.

“Lower mortgage rates have enabled many homeowners to re-fix their mortgages at lower rates for three to five years.

“This has either eased financial pressures so they no longer need to sell, or has led to homeowners deciding to stay put rather than sell and end up on a higher interest rate.”

Ms Whitehead suggested that other potential sellers are holding back and waiting for values to increase again, or the winter weather to abate.

“Many vendors have now adjusted their price expectations to current market levels”, she said.
“There is increased interest in the market in general, but more so, in good quality properties, often leading to multiple competing offers.”

She added that poorly presented properties need to be priced correctly to ensure they find their buyer.

Property values have increased in most of the main centres over the last quarter. As a result, there has been an improvement in the annual change in all areas.

In the Auckland area the annual change has improved to -5.9 per cent from -7.6 per cent last month. Hamilton has improved to -6.6 per cent, the Wellington area to -6.5 per cent, Christchurch to -7.3 per cent and Dunedin to -4.5%.

Tauranga was the only main centre to show a continued slight decline over the last quarter, but the annual change in values has still improved to -8.0 per cent from -9.4 per cent last month.

Slight increases in property values in recent months have also led to improvements in the annual change in most of the provincial centres. Whangarei improved slightly to -12.4 per cent, Rotorua improved to -8.1 per cent, Gisborne to -13.4 per cent, New Plymouth to -3.3 per cent, Palmerston North to -8.4 per cent, Queenstown Lakes to -7.0 per cent and Invercargill to -8.2 per cent.

Property values in Wanganui have continued to decline in recent months so the annual change has worsened to -6.0 per cent.