Quotable Value on Auckland property

Quotable Value on Auckland property



QV’s Residential Price Index for October shows that property values in the Auckland region are 2.7% higher than the same time last year. The Auckland City revaluation has now been completed and the capital value (CV) of every property updated. The QV residential property index is based on the ratio between sales price and these CVs. As a result of the changing CVs there has been a slight one-off adjustment to the indices for Auckland, making it appear as if values dropped slightly from September to October. The raw underlying data actually show that values have continued to increase, and the index next month is likely to once again show the upward trend we have seen in recent months.

Ms Glenda Whitehead of QV Valuation said; “Statistics aside, our valuers on the ground report that little has changed over the past couple of months. With no real boost to spring listing numbers trends look similar to those experienced in the winter months. While we continue to see sale prices move positively in many suburbs, activity is patchy. Where there is strong demand it is often not matched by listing levels resulting in some fierce competition for desirable properties. Typically, these are suburbs close to the CBD. Activity in many of the outer suburbs remains flat.”

“Within the Manukau area, particularly the eastern suburbs and Dannemora, we have noticed an increase in market activity. Many properties in these areas are achieving sale prices up to and above those at the height of the market in 2007” Ms Whitehead said.

Ms Whitehead said “Within the Southern investor orientated suburbs, ‘property finders’ and some speculators are re-entering the market doing properties up and on selling them. However, from our analysis there hasn’t been any real increase in market values being achieved in these areas as competition is not strong, but selling periods do appear to be shortening.”

“A particular trend we have seen in recent months has been the lack of activity within the leasehold apartment market, particularly in the Quay Park and Viaduct areas. This is linked to the ground lease renewals that are either imminent or underway in these locations, creating a great deal of uncertainty. Also, a number of developments in these areas have been subject to the fallout of BlueChip and weather-tightness issues. The converging of such issues along with the lease renewals has had a severe impact on activity and sale prices” Ms Whitehead said.

“There is an increased number of buyers in the market but they are being cautious, have set objectives, and often lack urgency unless they find exactly what they are looking for. There is also a growing trend of vendors selling privately, reducing their cost to sell, with the saving in some cases helping them purchase in the next value bracket” Ms Whitehead said.

Ms Whitehead said “October/November can be a turning point in the market setting a trend for the months that follow. If there is positivity in the wider market, this period can be hectic. Alternatively, when confidence is more fragile this can result in procrastination and many simply defer their financial decisions to the year following. This year, the general election could provide an additional excuse not to act.”

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 October was $526,861.

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