Property Market Values Stabilising

Thursday 14 May, 2009

The QV national residential property indices for April released today showed a 9.2 per cent decline in property values over the last year, a slight improvement on the 9.3 per cent decline reported last month.  This is the first time the trend in property values has improved since September 2007.

According to QV Valuations spokesperson Blue Hancock this marginal improvement reflects a stabilisation of prices being paid over recent months.  The QV statistics show that national property values peaked in January 2008, with current values now 9.6 per cent below that peak.

The average sale price declined from $378,399 in March to $372,981 in April, reflecting more sales at the lower end of the market.

"The increased market activity seen in February and March has flowed through into April, which has led to more sales than we would normally expect at this time of the year.” Mr Hancock said.

“There are clearly different dynamics across the property market, and people are carefully considering their options.  Lower interest rates and cheaper properties are leading first home buyers and investors back into the market.  Homeowners are also weighing up their situation, with some choosing to stay put and renovate, while others see great opportunities to upgrade, as the upper end of the market becomes more affordable.  As a result of this increased activity we are starting to see a shortage of listings, particularly at the lower value end of the market,” Mr Hancock said.

“Prices tend to be holding for mid value, well presented properties in good areas, whereas poorly presented properties and properties at the top end of the market are taking longer to sell and are struggling to hold their value,” Mr Hancock said.

Property values in the main centres have begun to flatten over recent months.  As a result the annual change in property values across the Auckland area has improved from -10.1 per cent last month to -9.0 per cent.  The Wellington area has also improved to -8.5 per cent, Hamilton to -8.8 per cent, Christchurch to -9.6 per cent and Dunedin to -8.0 per cent.  Tauranga is the only main centre to worsen, with the annual decline slipping to -9.9 per cent.

Prices being paid for property in most provincial centres have been flat for the past few months leading to improvements in the year on year change in many areas.  The year on year change has improved to -9.8 per cent in Rotorua, -5.4 per cent in New Plymouth, and -10.2 per cent in Palmerston North.  Gisborne has remained steady at ‑14.8 per cent, while Whangarei at -13.1 per cent and Queenstown Lakes at -9.3 per cent have both fallen further.

Mr Hancock said “Recent stabilisation of property values in many areas suggests that we may be near the bottom of the market.  We expect values to remain relatively flat over the winter months, although the threat of rising unemployment may affect an increasing number of homeowners and potential home buyers.  There will continue to be good opportunities for buyers who can afford to be in the market”.

Click to view regional commentary: http://www.qv.co.nz/aboutus/pressreleases/propertymarketvaluesstabilising11052009.htm