House buyers cautious

12 April, 2010

Property values across New Zealand are 6.1 percent above the same time last year according to the QV residential property indices for March. Despite being above last year, values in the most recent months have begun to ease back in many areas. Nationally, values are 3.9 percent below the market peak of late 2007.

The national average sales price in March decreased to $407,133 from $416,074 in February. While roughly indicative of value, the average sales price is a less reliable measure of change than the QV index as averages can be biased depending on which part of the market is active.

Glenda Whitehead of QV Valuations said “the property market is now quite different to what we saw in the second half of 2009. Not only have values remained relatively flat for the past few months, but the urgency amongst buyers has all but gone”.

Whitehead said “we have seen the usual seasonal increase in new listings over February and March. This has led to more choice for buyers, but sales activity remains relatively subdued. Buyers appear to be holding back as concerns linger over job security, bank funding is perceived to be difficult to secure, and any tax changes remain unknown”.

“The properties that are selling well are those that are well presented and appropriately priced. Buyers are generally being thorough in their research, and offers are often full of conditions.” said Whitehead.

“The range of factors affecting the property market remain finely balanced. How these factors change over the comings months will determine which way the property market goes. However we expect values to remain relatively stable rather than decline significantly” said Whitehead.

Values have eased over the last few months in all the main centres, but are still above the same time last year. The Auckland Region is 9.9 percent up, the Wellington Region 6.6 percent up, Christchurch 6.9 percent up, and Dunedin 7.3 percent up. Values have grown less over the last year in Hamilton which is now 3.8 percent above last year and Tauranga which is only 0.1 percent above last year.

The provincial centres continue to show more variability in values. New Plymouth (7.6 percent) and Palmerston North (7.3 percent) have grown the most over the past year. Rotorua (4.5 percent), Gisborne (4.5 percent), Nelson (5.4 percent), and Invercargill (4.7 percent) have all shown moderate growth over the past year. Wanganui is only 0.5 percent above last year, while Whangarei at -1.1 percent and Queenstown Lakes at -1.8 percent are below last year.

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