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Tuesday 8th February 2011

Nationwide property values stabilise

Residential property values for all New Zealand have stabilised according to the QV indices for January, but there remains considerable variability between areas.
 
While nationwide values have been gradually declining over the past few months, the rate of this decline has been slowing, and values remained unchanged between December and January. Although recent values have stabilised, this time last year values were still increasing and as a result the year on year comparison dropped slightly to  1.5 percent from the -0.9 percent reported last month. Values are now 5.8 percent below the market peak of late 2007.

“Despite overall New Zealand values stabilising in recent months, there is considerable variability between areas. Values across the combined main centres have been stabilising, while across combined provincial and rural areas values have continued to slide” said QV.co.nz Research Director, Jonno Ingerson.

“There is also variability between the main urban areas. Auckland has been stable for several months and values are now only 0.6 percent below the same time last year. In the Wellington area values have been rising since October after declining steadily in the six months prior and are now 2.5 percent below last year. Christchurch is the only main centre where values are above the same time last year at 0.3 percent as demand for houses in areas undamaged by the earthquakes has lifted prices. The remaining main centres have generally declined over the past year and values in Hamilton are now 3.4 percent down on last year, Tauranga down 2.2 percent, and Dunedin down 3.7 percent” said Mr Ingerson.

“Sales activity slowed down over December and January as is usually the case. With the Christmas holidays over and people settling back into their routines, some will now be considering their plans for the year and beginning to act on them. However it is still too early to tell whether the property market in 2011 will be any different to 2010” 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 $409,067 which is similar to the $410,058 reported last month.

Values are below the same time last year in Whangarei (-4.4 percent), Rotorua (-3.3), Gisborne (-5.2), Wanganui (-2.6), Palmerston North (-3.3), Queenstown Lakes (-3.3) and Invercargill (-3.8). Values are slightly below last year in Hastings (-1.6 percent) and New Plymouth (-1.5), and similar to last year in Napier (-0.1). The only centre to remain above last year is Nelson where values are 1.4 percent up.

		NZ MAIN AREAS   SIGN UP TO YOUR AREA
Auckland Region -2.5% $547,898 Hamilton -3.4% $352,289 New Plymouth -1.5% $320,634 Palmerston Nth -3.3% $291,625 Christchurch 0.3% $374,153 Queenstown -3.3% $522,135 Invercargill -3.8% $212,990				Whangarei -4.4% $320,451 Tauranga -2.2% $400,041 Rotorua -3.3% $272,260 Napier -0.1% $342,808 Hastings -1.6% $310,657 Wellington Rgn -1.1% $465,926 Nelson 1.4% $372,303 Dunedin -3.7% $267,716
		New Zealand -1.5% $409,067     Annual Property Value Change     Average Sales Price
		View FAQs on the Property ValueMap

Main Urban Areas Commentary:

Auckland
QV’s Residential Price Index for January shows that property values have decreased by 0.6% over the past year in the Auckland region. Regions across Auckland are tending to behave differently, although generally values remained fairly stable over recent months.

Ms Glenda Whitehead of QV Valuations said; “Even though year-on-year values have been negative, there was relatively limited market movement in the Auckland region in the latter half of 2010.  The low sales and listing volumes in December and January are of concern, but being a traditional holiday period at the end of a slow year, not overly surprising”.

“One trend that continued throughout 2010 was quality homes in sought after areas selling well. Poorly presented homes in fringe areas haven’t sold nearly as well.  We continue to see evidence of downward pressure on values of plaster homes built in the 1990s and early 2000s” said Ms Whitehead.

Ms Whitehead said “People are considering property decisions and gathering information, but appear to be waiting for a signal or change in the market.   We are aware that there are some first home buyers taking advantage of the ‘Welcome Home Loan’ package supported by Housing New Zealand.  In the South Auckland area there appear to be plenty of buyers looking, but they are being cautious and are not in a hurry to commit. Potential buyers will purchase at the right price, however there still seems to be differences between buyers and sellers expectations of value”.

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 January was $547,898.

Hamilton
QV’s Residential Price Index for January shows that property values have decreased by 3.4% over the past year in Hamilton. Values continue to fluctuate in a narrow band.

Mr. Richard Allen of QV Valuations said; “Values across all locations within Hamilton eased back over the past month. Traditionally the onset of spring and summer results in a lift in activity and a surge in sales volumes. This doesn’t appear to have happened, with Hamilton’s residential market remaining quiet but there are signs it has bottomed out. At the moment the lack of demand is due to uncertainty in the economy and confidence in its recovery.”

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 January was $352,289.

Tauranga
QV’s Residential Price Index for January shows that property values have decreased by 2.2% over the past year in Tauranga. Values have continued to be fairly stable in the more recent past, although some fluctuations are evident.

Mr. Shayne Donovan-Grammer of QV Valuations said; “Over the last couple of months values have continued to soften.  At this stage there are no indicators that suggest the market will improve in the coming months. Whilst there is a lack of activity, it is not uncommon for this time of year. Speculative property, namely apartments and sections which were developed during the economic heights a few years ago, are in oversupply and therefore are experiencing the worst during the current downturn.”

“There has been a noticeable migration of both buyers and tenants to locate near well regarded schooling leading into the new school year. As the city grows it will become more of a factor in buyers’ decision making in coming years” 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 November was $400,041.

Wellington
QV’s Residential Price Index for January shows that property values in the Wellington region have decreased by 2.5% over the past year.  Following the decline in values through 2010, the index has recently recovered somewhat.

 
Mr. Kerry Buckeridge of QV Valuations said; “Values in the Wellington region are showing positive signs.  This is as a result of Wellington and Porirua posting value gains, however, Hutt City and Upper Hutt have dropped slightly.”

“To date sales volumes have been lower compared to this time last year, though indications from the market are that a good number of listings have appeared recently.  Across the Wellington region properties appear to be selling well provided they are priced appropriately.  We are beginning to see multiple offers on good properties – a situation we have not seen for quite a while” Mr. Buckeridge said.

“In summary, it is still very early in the year and therefore not possible to draw firm conclusions on the direction of the market for the year ahead. However, there are some signs giving cause for cautious optimism both in terms of sales volumes and values” Mr. Buckeridge 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 Wellington in January was $465,926.

Christchurch
QV’s Residential Price Index for January shows that property values in the Christchurch has increased by 0.3% over the past year.  Following the Earthquake values were fairly stable, with even some improvement more recently.

 
Mrs Melanie Swallow of QV Valuations said; “Values appear to have recovered slightly since the September earthquake and aftershocks.  The increase in activity and sales volume is positive, although it needs to be treated in context.  An increase in demand for property in relatively unaffected suburbs has had a very small corresponding lift in sale prices, which is what we expected to see. The statistics and anecdotal evidence are in support of this”.

“Since the initial delay in activity as a result of earthquake, we are now seeing more listings coming to market, more buyer enquiry and a clear increase in activity, particularly in the entry level sector” Mrs Swallow said.

“There is strong interest overall for well priced and good quality homes in suburban Christchurch at present. In the upper end of the market there have been a few million dollar plus property transactions recorded. Both the lifestyle and holiday home markets reflect the sluggish economy.  Some lifestyle areas continue to remain flat, but this trend was evident pre-earthquake.  The holiday home market is also very static with low sales volumes” Mrs. Swallow 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 January was $374,153.

Dunedin
QV’s Residential Price Index for January shows that property values in Dunedin have decreased by 3.7%.  Values have continued to decline over the past couple of months.

 
Mr. Tim Gibson of QV Valuations said; “The start of 2011 has seen a cautious residential property market in Dunedin City.  Falling values and sales volumes have been experienced across all suburbs, except for central and northern city where values have remained steady. QV’s statistics are also showing sales volumes are 10% less over the whole city than for the same recorded period in 2010”.

“We have seen some optimism in the residential market for January with open home enquires being strong. However, there has been a shortage of good quality homes listed in Dunedin city. This has seen values in the top-end of Dunedin’s residential market steady in comparison to lower price brackets. This is one of the reasons why values in central and northern Dunedin are performing better than elsewhere” Mr. Gibson said.

Mr. Gibson said “It appears that the market has become more weighted in favour of the purchaser.   There are reports of numerous sale prices being renegotiated following problems identified in a LIM (Land Information Memorandum) or builder’s reports, where in a stronger market the vendor would be reluctant to renegotiate.”

“Overall, we will have to wait-and-see what value trends will be for 2011, as it is currently a bit too soon to be making any major prediction” 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 January was $267,716.