Property values continue to decline

Monday 8 September, 2008

QV's August statistics for the residential property market report a 4.5% decline in national property values over the past year (calculated over the three months ending August 2008 in comparison to the same period last year), down on the 2.2% decline reported in July. The average New Zealand sale price reduced slightly to $391,487.

“Property values continue to fall across the country with all main and provincial centres now showing values lower than they were 12 months ago” said Blue Hancock of QV Valuations. “There are definitely more properties selling at reduced prices as vendors adjust their expectations. Areas on the fringes of main centres and holiday homes are particularly affected as increasing commuting costs and decreasing discretionary spend become key considerations” said Hancock.

“The market has been out of equilibrium with a lack of buyers, however there are early signs of a more positive mood. Many buyers are realising that price decreases are making this a good time to buy, and that they can bargain strongly. As a result there will be further declines in value before the market levels out” said Hancock.

“Some investors also appear to be re-entering the market, particularly in Auckland and Wellington, as they pick up well priced properties. However across the country investment returns are being impacted by an increase in properties available for rent, higher mortgage payments, and an outlook of minimal capital growth” said Hancock.

Across the Auckland area property values are down 5.8% compared to the same time last year, declining further from the -3.6% reported last month. Hamilton City’s values have slipped further to -8.5% and Tauranga to -5.3%. The Wellington area has also declined further to -2.9%, Christchurch to -5.8% and Dunedin to -7.8%.

All of the main provincial centres are now showing property values less than the same time last year. Whangarei has declined -4.1%, Rotorua -0.3%, Gisborne -10.4%, Napier -3.6%, Hastings -4.1%, New Plymouth -4.8%, Wanganui -4.5%, and Palmerston North -8.1%. In the South Island, Nelson dropped further to -3.7%, Queenstown Lakes to -3.4%, and Invercargill becomes the last of the provincial centres to drop into negative growth at -0.1%.

To view the regional commentary Link this wording to

https://www.qv.co.nz/aboutus/pressreleases/mixedsignalsinthepropertymarket08092008.htm