Property Values Steady

Media release

12th April 2011

Property Values Steady

Residential property values remain relatively stable at a national level according to the QV indices for March, but there continues to be variability between areas.

“Over the last twelve months nationwide values declined gradually through until December before becoming a little more variable in the months since. As a result values are now 2.0 percent lower than the same time last year, and 5.9 percent below the market peak of late 2007” said QV.co.nz Research Director, Jonno Ingerson.

“The levelling of national values in the last few months was largely driven by a slight recovery in values in Auckland and Wellington, offsetting the continued declines in provincial and rural areas. These first signs of a possible recovery in values were short lived as both Auckland and Wellington slid back again in March. With the uncertainty created by the Christchurch earthquake, and the low level of sales activity in previous months, it is reasonable to expect that there may be some volatility in the market for a few months” said Ingerson.

“There was a lift in activity in March, particularly in Auckland and Wellington, after a quiet January and February. First home buyers are back looking in the more affordable areas perhaps buoyed by lower interest rates. However many buyers remain non-committal, knowing that there is limited competition and that values are not expected to rise significantly in the short term. Good quality properties continue to attract interest and sell at the value expected” said Mr Ingerson.

“In Christchurch there is strong interest for well priced quality homes in suburbs that were not affected by the earthquake. This is also the case in the Waimakariri and Selwyn townships, along with an increase in demand for vacant sections. This is a similar pattern to after the September earthquake. There remains a great deal of uncertainty in the market and we expect that to continue for some time while decisions about the nature of the rebuild in Christchurch are made” 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 is $400,656 down from the $411,712 reported last month.

None of the provincial centres have values above the same time last year. Compared to this time last year Whangarei is -6.2 percent, Rotorua -4.2, Gisborne -6.0, Hastings and Napier both -1.5, New Plymouth -3.7, Wanganui -3.6 and Palmerston North -4.0. In the South Island Nelson has one of the strongest markets and now sits level with last year, while Queenstown Lakes is -1.7 percent below last year and Invercargill 3.4.

Auckland

QV’s Residential Price Index for March shows that property values have decreased by 1% over the past year in the Auckland region. Values dropped following recent growth.

Ms Glenda Whitehead of QV Valuation said “Overall, the underlying statistics indicate a relatively stable market in the Auckland region. An increase in March sales volumes compared to previous months suggests a pick up in activity.”

“There are areas in Auckland that are performing better than others. As expected the suburbs are typically in close proximity to the CBD, and many offer character homes, or favored school zones.” Ms Whitehead said.

Ms Whitehead said “The indication is that buyers, perhaps on the back of low interest rates, are stepping into the market more seriously in some areas. First home buyers have been spotted in the more affordable suburbs of the region.”

Ms Whitehead said “The general feeling is the market still lacks any urgency, due to a prediction of limited short term value growth. Many only act if a property meets the majority of their criteria. Those selling a property that fits the criteria, are tending to get a favorable sale price, especially if there are no other similar properties available. But this is just one small slice of the market.”

“Those with properties that don’t match buyers check-list or there are a number of similar ones on the market, values tend to be relatively flat. If a property has a number of features considered as negative by buyers, these are being factored into offers, and affects the length of time for the sale to be completed.” Ms Whitehead said.

“We have also noticed more people renovating their existing properties, with some refinancing to facilitate this process.” Ms Whitehead said

QV’s Residential Price Index is calculated using sales data from the 3 months leading up to the month being reported. It is not the same as the average sales price, which fluctuates in line with the mix of properties selling in upper or lower price brackets. The average sales price for the Auckland region in March was $535,131.

Hamilton

QV’s Residential Price Index for March shows that property values have decreased by 3.8% over the past year in Hamilton. Values have continued to fall for the past couple of months.

Mr. Richard Allen of QV Valuations said: “The residential property market in Hamilton has shown signs of resilience with values in the city increasing slightly by 0.1% over the past year (calculated over the three months ending March 2011 in comparison to the same period last year).

“The property growth ranged for different areas within Hamilton. The North East and Central City/North West increased. Whilst South East Hamilton and South West Hamilton decreased.” Mr. Allen said.

Mr. Allen said “There doesn’t appear to be anything in the short term that will stimulate Hamilton’s residential market, which is likely to remain subdued for the foreseeable future.”

QV’s Residential Price Index is calculated using sales data from the 3 months leading up to the month being reported. It is not the same as the average sales price, which fluctuates in line with the mix of properties selling in upper or lower price brackets. The average sales price for Hamilton in March was $330,701.

Tauranga

QV’s Residential Price Index for March shows that property values have decreased by 2.4% over the past year in Tauranga. Values have continued to trend downwards.

Mr. Shayne Donovan-Grammer of QV Valuations said; “Overall the Tauranga market is subdued but there is still good activity within some price brackets and locations.”

“A build up of listings is occurring partly because the property supply tends to be at higher price points compared to where the demand lies. Tauranga has the advantage of having a sizeable population base. This means there will always be a pool of buyers and a chance to sell. To capture those limited buyers, properties need to be better presented and realistic prices reflective of the market, not what the house used to be worth or what they paid for it. The days of getting reasonable money for a tired looking property are long gone, the market simply won't tolerate it.” Mr. Donovan-Grammer said.

QV’s Residential Price Index is calculated using sales data from the 3 months leading up to the month being reported. It is not the same as the average sales price, which fluctuates in line with the mix of properties selling in upper or lower price brackets. The average sales price for Tauranga in March was $403,744.

Wellington

QV’s Residential Price Index for March shows that property values in the Wellington region have decreased by 2.9% over the past year. Values declined after showing growth in recent months.

Mr Pieter Geill of QV Valuations said: “We have seen growth in sale volumes and listings over the last month. However, values have fallen across the Wellington area and are marginally below what they were a year ago. This is despite lower interest rates and greater affordability as a result.”

“Agents have indicated there is a good level of interest in the low to medium sectors of the market. Buyers are still non committal, in the knowledge there is limited competition. Good properties continue to attract interest and sell at the value expected. There have been examples of multiple offer situations resulting in premium prices.” Mr Geill said.

Mr Geill said “As we head into the winter months the Wellington market is difficult to predict. It is traditionally perceived to be a poor time to sell and as yet we have not felt the impact of the recently announced Public sector restructuring.”

QV’s Residential Price Index is calculated using sales data from the 3 months leading up to the month being reported. It is not the same as the average sales price, which fluctuates in line with the mix of properties selling in upper or lower price brackets. The average sales price for Wellington in March was $449,187.

Christchurch

The significant slowdown in the number of sales, and the delays in the overall sales process in Christchurch following the 22 February earthquake mean that the QV residential price index cannot yet be used to measure the change in property values.

Mrs. Melanie Swallow of QV Valuations said; “There is strong interest overall for well priced quality homes in suburban Christchurch that were not been affected by the earthquake. This appears to be the case in even some of the harder hit suburbs, including Redcliffs and New Brighton.”

“Anecdotal evidence at this stage shows strong interest in the North Western suburbs and the Waimakariri and Selwyn townships. There has also been a reported increase in the demand for vacant sections.” Mrs. Swallow said.

Mrs. Swallow said “The fact that the market has some traction is very encouraging, but there is still a long way to go. The demand is generally coming from families wanting to “get on with it”. After the September earthquake there was interim pressure on house prices for undamaged homes, and it is reasonable to see this pattern re-emerge. There remains a lot of uncertainty in the market and we expect market sentiment to be quite fragmented for some time to come.”

Dunedin

QV’s Residential Price Index for March shows that property values in Dunedin have decreased by 3.8%. Values have fluctuated a little over the past couple of months, but generally in a downward trend.

Mr. Tim Gibson of QV Valuations said: “The residential property market in Dunedin continues to show little signs of recovery. Values and sales volumes have continued to fall, which is the trend experienced over the past six months.”

“Only well presented dwellings in good localities are in demand, with some quick sales occurring for these types of property within Dunedin. However less demand exists for dwellings with deferred maintenance issues especially in the lower price bracket. These types of properties sometime have to be highly discounted from their listing prices to achieve a sale.” Mr. Gibson said.

Mr. Gibson said “A recent sale emphasising the decreasing value levels is a Corstorphine property. This was a sound but original brick bungalow selling in March 2010 for $205,000 and has recently just sold again for $196,000 representing a 4.4% decrease over a one year period.”

“The more provincial regions within the Otago District are also showing similar trends as Dunedin City. Statistics show that Clutha District residential values are showing an annual change of - 4.0% and Waitaki District residential values showing an annual change of – 3.4%” Mr. Gibson said.

QV’s Residential Price Index is calculated using sales data from the 3 months leading up to the month being reported. It is not the same as the average sales price, which fluctuates in line with the mix of properties selling in upper or lower price brackets. The average sales price for Dunedin in March was $263,542.

ENDS

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