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Gradual value decline continues10 November, 2010 New Zealand property values continue to gradually decline according to the QV residential property indices for October. Values are now 5.5 percent below the market peak of late 2007. After the peak, values dropped during 2008 to a low in early 2009, before rising again until early 2010, then beginning to decline again. Over the last twelve months values first rose 2.8 percent from October 2009 to March 2010, before falling back 1.6 percent since March. As a result, values are still 1.1 percent above last year, but that gap continues to close.  “The low level of sales activity we have seen all year continued through October, with sales well below both last year and the long term average. There is no sign of the traditional spring surge in sales, and we don’t expect any significant increase in sales before the New Year” said QV.co.nz Research Director, Jonno Ingerson. “In most areas there are plenty of properties for sale, but many of these have been on the market for some time. The number of new properties coming on the market is lower than usual for this time of year. There remains a general air of caution around the property market. Some owners are choosing to stay rather than sell, some potential buyers are struggling to secure funding as lending criteria remain tight, and in general buyers are taking their time over purchase decisions” said Mr Ingerson. “While nationwide values are declining, there is considerable variability within and between areas in response to local influences. The Auckland area is showing signs of stabilisation, while values in the Wellington area are dropping steadily. At a local level these trends also don’t apply universally, with quality properties in good areas attracting plenty of interest and often selling for good prices, while those with undesirable features are not selling or are selling at reduced prices” said Mr Ingerson. While unrelated to the QV index, and a less reliable measure of value change, the average New Zealand sales price over the last three months has dropped to $399,055 from the $401,968 reported last month. Unlike the decreasing national trend, values in the Auckland region have stabilised in recent months, and have dropped only 1.0 percent since March. Values rose steadily throughout 2009 before levelling earlier this year, so compared to the same time last year values are still 3.0 percent higher, but this gap has closed from the 4.3 percent reported last month. Values in Hamilton and Tauranga have dropped in recent months, with Hamilton now 1.8 percent below the same time last year, and Tauranga 2.5 percent below. Values in the Wellington area have dropped 3.4 percent since March, which is more than any of the other main centres. Values are now 0.6 percent below the same time last year. The property market in Canterbury is slowly beginning to recover from the Earthquakes. The number of sales slowed dramatically in the weeks following the earthquake, but they are now beginning to pick up in the less affected areas. The low number of sales in Canterbury since the earthquake means that the QV index still cannot be generated reliably. The various Canterbury area indices will therefore remain as they were published prior to the earthquake with values in Christchurch at the end of August 3.2 percent above last year. Values in Dunedin have continued to be variable in recent months, and are now 0.9 percent above the same time last year. Values for the combined provincial centres have been more or less stable since June before dropping over the last month. There is variability from centre to centre with some increasing in recent months, others stable and others decreasing.  |
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