Decline in property values continues

Tuesday 21 October, 2008

QV's September statistics for the residential property market report a 5.8% decline in national property values over the past year (calculated over the three months ending September 2008 in comparison to the same period last year), down on the 4.5% decline reported in August. The average New Zealand sale price for September was $379,854.

"Indications last month that a more optimistic mood had come over the market have since evaporated" said Mark Dow of QV Valuations. "We are moving into an economic recession and there is plenty of speculation that things will get worse before they get better. Uncertainty about the impact of the global credit crisis, the usual lack of activity prior to an election, and significant tightening of lending policies by the banks is contributing to pessimism in the property market and there is little expectation of any spring resurgence. The requirement to have a significant deposit will take many first home buyers and investors out of the market, reducing demand and putting further downward pressure on prices" said Dow.

Across the Auckland area property values are down 7.0% compared to the same time last year, declining further from the -5.8% reported last month. Hamilton City’s values have slipped slightly to -8.8% and Tauranga to -7.6%. The Wellington area has also declined further to -5.4%, Christchurch to -7.1% and Dunedin to -8.5%.

Most of the main provincial North Island centres are showing further declines in year on year value compared to those reported last month. Whangarei has declined further to -6.6%, Rotorua -6.4%, Napier -4.4%, Hastings -7.0%, New Plymouth -7.0%, Wanganui -5.5%, and Palmerston North -9.4%. Gisborne is the only centre to improve slightly to -10.1% compared to the -10.4% reported last month. In the South Island, Nelson dropped further to -4.0%, Queenstown Lakes to -5.3%, and Invercargill to -1.6%.

Read more market commentary for the main urban areas