Tuesday, 13 September 2011
National property values gradually increasing
National property values have continued to gradually increase according to the QV residential property index for August.
“Nationwide property values have again increased slightly over the past month and are now 0.1 percent above the same time last year and 5.0 percent below the market peak of 2007” said QV.co.nz Research Director Jonno Ingerson.
“Although nationwide values are gradually increasing, there remain differences between areas, with the Auckland and Canterbury areas in particular helping to hold up values overall” said Ingerson.
"Values in the Auckland area have increased 2.8 percent since January, and are now 2.2 percent above the same time last year and only 0.3 percent below the previous market peak of late 2007. With the exception of the Rodney area, values have grown in recent months across the Auckland Supercity. The old Auckland City has increasing the fastest – by 3.0 percent over the past year, and is now 1.5 percent above the previous market peak of 2007. North Shore has increased 2.4 percent over the past year, and Waitakere and Manukau just over one percent” said Ingerson.
“Recent trends have continued in other main centres with values in Hamilton and Tauranga remaining relatively stable although still below last year by 1.8 percent in Hamilton and 0.5 percent in Tauranga. Dunedin has seen some volatility in values over the past year but values in general appear to be decreasing, and are now 2.9 percent below this time last year” said Ingerson.
Ingerson said “values in the Wellington area have continued to decline, dropping 1.9 percent since January and 2.4 percent over the past year. Unlike Auckland where values are now just below the previous market peak, Wellington is 7.7 percent below. However there are the first signs that values may be levelling off”.
“In Christchurch values have been increasing steadily for the past few months, driven by good demand for houses in undamaged areas. Compared to this time a year ago values are up by 1.7 percent, with most of that growth being in the past few months. Areas surrounding Christchurch have seen strong value growth over the past year with the Selwyn, Waimakariri and Ashburton Districts all up by around 4 percent” said Ingerson.
Ingerson said “some of our recent provisional data suggests that values in Auckland may be levelling off a little, although it is too early to be sure. In Wellington there are also signs that values may be levelling. In both centres there are indications that the number of new listings may be increasing which may offer fresh choices for potential buyers. If this turns out to be the case then sales volumes should pick up in Spring following the traditional seasonal pattern which has been largely absent in recent years”.
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 $406,679.
Most provincial centres have seen values either increase or remain steady in the past three months, although compared to twelve months ago current values are still generally lower. Queenstown Lakes in the main exception with values 3.5 percent above the same time last year. Hastings (-0.2 percent), Napier and Nelson (both 0.2 percent) have values similar to last year, with Palmerston North (-0.8) not far behind. Whangarei (-3.8), Rotorua (-2.6), Gisborne (-4.1), New Plymouth (-3.0) and Invercargill (-3.4) all remain down on last year. Wanganui is the only provincial centre to have dropped significantly over the past three months and values there are now 7.2 percent down on this time last year.
Main Urban Areas Commentary
QV’s Residential Price Index for August shows that property values in the Auckland region are 2.2% higher than the same time last year. Values are continuing to increase.
Ms Glenda Whitehead of QV Valuation said; “The quick summary of the Auckland region – there are a lack of quality listings. When properties are placed on the market they are selling quickly and for a good price. In many cases it’s toward the upper end of the value range for that area or type of property. There is a hint of more properties being listed as we come into spring, and if this comes to fruition it may address what looks like a temporary supply/demand imbalance.”
“Central Auckland continues to perform strongly. Quality and character properties in popular inner city locations are selling well and in some instances above expectation at auction. While there is the odd example of extreme sale prices, many sit within established value ranges” Ms Whitehead said.
Ms Whitehead said “we have seen spiky sale prices in the popular school zones or traditional areas where demand continues to be high and supply low. While agents have indicated people are prepping their properties to put on the market, only time will tell if we see a change in the supply and demand balance being experienced right now.”
“In West Auckland, popular suburbs of Te Atatu, New Lynn, Green Bay and Titirangi are achieving good sale prices. Agents are reporting steady buyer activity, but indicating there is a lack of quality properties available. Home-and-income properties remain sought after from both owner occupiers and investors. We are seeing many properties going to auction, as current owners look to benefit from the increased interest. Vacant infill sites are now starting to sell, with many purchasers intending to build in the short term” Ms Whitehead said.
Ms Whitehead said “on the North Shore values are increasing slightly in a number of suburbs after low winter listing levels. Again this is driven by the quality listings. Properties with issues or poorer presentation are slower to sell, and at levels reflective of their attributes. Listing levels appear to now be rising, which is a typical spring trend.”
“In the South East there also continues to be a lack of quality properties available. A large number of the listed homes tend to be plaster homes, which buyers (and lenders) are very cautious of. For these types of properties we see extended selling periods and they don’t tend to hold their value like homes constructed with more trusted materials. They do however represent a viable option for some trying to get into an area they might otherwise not be able to afford, but obviously with some risks” Ms Whitehead said.
Ms Whitehead said “those well presented homes in good localities that are reasonably priced are achieving good sale prices and are selling within short periods of time. Many owners with these types of properties are choosing to sell by auction.”
“In the investor areas, investors remain cautious and agents advise that many are only interested in properties which are showing positive cash flows” 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 August was $532,296.
QV’s Residential Price Index for August shows that property values in Hamilton are 1.8% lower than the same time last year. Values in the region continue to be flat.
Mr. Richard Allen of QV Valuations said: “Values in Hamilton City continue to fluctuate in a very narrow band. This means that the residential market in the city appears to have completely levelled off.”
“We have started seeing some positive signs in the market, perhaps an indication that the spring season has started a little earlier. Hamilton City, Central City, North West, South West Hamilton, North East and South East Hamilton have or look to be moving a positive direction” Mr. Allen 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 Hamilton in August was $339,335.
QV’s Residential Price Index for August shows that property values in Tauranga are 0.5% lower than the same time last year. Values remain fairly steady.
Mr. Shayne Donovan-Grammer of QV Valuations said; “The Tauranga market has not seen any significant changes for a few months now. As is the case every year, we expect to see a gradual increase in activity from now until the end of year.”
“A lot of potential sellers who purchased properties in the last five years have come to the realisation they may not receive an offer price the same or greater than when they purchased. This means they are in a holding and waiting pattern to see what the market does” Mr. Donovan-Grammer said.
Mr. Donovan-Grammer said. “buyers aren't in a hurry either as they perceive the market isn't going to ‘get away from them’ any time soon. They are also being much more thorough before committing themselves as the market conditions allow them to be.”
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 August was $427,414.
QV’s Residential Price Index for August shows that property values in the Wellington region are 2.4% lower than the same time last year. Values in the region continue to decrease.
Mr Pieter Geill of QV Valuations said; “Wellington is in a holding pattern. Despite some agents doing very well, the region is still slow with low sales volumes and cautious buyers.”
“It appears that previous declining values are leveling off. This however needs to be taken into context with the continuing public sector restructuring and now, the start of the Rugby World Cup – will you be able to get your good Kiwi bloke to an open home in the next six weeks? The market could slow down in a manner similar to what happens during some school holidays” Mr Geill said.
Mr Geill said “agents still report a shortage of good listings and unrequited buyers who can’t find the right property and are reluctant to put pen to paper. Anecdotally, investors are back, but only the cheeky ones trying to steal bargains.”
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 August was $438,016.
QV’s Residential Price Index for August shows that property values in Christchurch are 1.7% higher than the same time last year. Values continue to increase, driven by activity in the unaffected areas.
Mr. Brendon Bodger of QV Valuations said; “There is definitely an increased demand for property in the relatively unaffected suburbs of Christchurch. The market is gaining traction, particularly at the entry level. Values continue to show some recovery.”
“Attendance at open homes and enquiries for vacant residential sections is strong. With interest for well priced, quality homes in the North West and South West suburbs as well as the main Selwyn and Waimakariri townships” Mr. Bodger said.
Mr. Bodger said. “sale prices continue to hold, even in the eastern suburbs. Agents are reporting multi offer situations. A number of sales have occurred in the white zone (which means the area requires further geotechnical investigation), with purchasers mitigating their risk by not paying over Capital Value in case the property is re-zoned red. There has also been activity for quality lifestyle properties in the million dollar plus range which is very encouraging.”
“This increase in market activity, particularly buyer enquiry, is being driven from those in red zone areas. They are evaluating their options as their government letters of offer arrive in the post. We are aware of a number of property owners who have already accepted the offer and have purchased property elsewhere in Christchurch” Mr. Bodger 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 Christchurch in August was $378,738.
QV’s Residential Price Index for August shows that property values in Dunedin are 2.9% lower than the same time last year. Values continue to be volatile but are generally decreasing.
Mr. Tim Gibson of QV Valuations said; “the Dunedin residential market has seen another slow month with values falling slightly. It is not isolated to Dunedin; provincial Otago is also experiencing similar market conditions.”
“We have seen longer selling periods, a reluctance for potential purchasers to commit and patchy interest for properties. The two snow storms in August may have contributed a small amount towards this” Mr. Gibson said.
Mr. Gibson said “a positive is that the entry level market is performing reasonably well. There have been increased sales when compared to the corresponding time last year. As values have reduced over the past six months and a sense that interest rates might increase soon, it is seen as an ideal time to purchase that first home or even a rental investment. To date there has been no increase in values in the lower end market as a result of this increased activity.”
“Real Estate firms are reporting an influx in listings due to the arrival of spring. This is likely to give prospective buyers more choice in the market. It may also result in decreased selling timeframes and possibly some value growth” 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 August was $268,675.