Active autumn market but values still dropping

Monday 27 April, 2009

QV's March statistics for the residential property market report a 9.3% decline in national property values over the past year (calculated using the QV index over the three months ending March 2009 in comparison to the same period last year), down further from the 8.9% decline reported last month. The average New Zealand sale price for March fell slightly to $378,399 and has now declined 2.7% over the past year. Average and median sales prices are not considered to be a reliable measure of change in property value, as both measures can be influenced by a change in the proportion of high or low value selling. The QV index is not affected by these changes in composition, and so represents a more reliable measure of property value.

“Our Valuers are reporting signs of increased buyer activity in the market, with more people attending open homes, and more sales occurring. This is a continuation of the increased activity in February, but also typical of March, which is traditionally the month when most sales occur” said Blue Hancock of QV Valuations.

“Our analysis shows that property values have dropped 9.3% over the last year, worse than last month. However, this further decline is being driven by falls across the Auckland region, particularly in Auckland City and Manukau. Many other areas of the country are beginning to see property values flattening, particularly in provincial cities and across parts of the Wellington area” said Mr Hancock.

“Despite signs of stability in property values across some areas of the country, there remains widespread uncertainty over what the coming months may bring. The number of sales traditionally drops during autumn and winter, but how interest rates impact market activity and the extent to which broader economic factors, in particular declining job security, will affect the property market remains unclear” said Hancock.

Property values across the Auckland area continue to decline further, and are now down 10.1% compared to twelve months ago. Tauranga at -8.7% and Christchurch at 9.7% have also slid back a little further. In contrast the year on year changes in Hamilton -9.3%, the Wellington area -8.7%, and Dunedin -8.8% have all improved.

There are recent signs of flattening property values in many provincial centres, and as a result Whangarei -12.1%, Rotorua -11.0%, New Plymouth -6.4%, Palmerston North 11.3% and Queenstown Lakes -7.9% are all showing similar levels to those reported last month. Gisborne has continued to slide back, with values now down 14.8% compared to the same time last year.

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