Monday 13th March 2006

Property Market Eases Slightly

QV’s February property statistics released today indicate that residential property values rose by 15.3% over the past twelve months, down on the 16.8% reported in January.

“The February statistics show an easing in the Residential Price Movement reflecting feedback from the market that there is a softening in demand and less pressure on prices,” says QV spokesperson Blue Hancock.  “An annual growth in property values of 15.3% is still very strong, and although the growth rate has dropped slightly, the decrease is not at a level that would suggest any dramatic change in the market.”

All of the main centres saw a slight decrease in the annual growth rate from the statistics reported in January.  With Hamilton dropping from 26% to 25.4%, Christchurch down to  17.5% growth, Wellington 13.0%, Auckland 10.5% and Dunedin 9.8%.

Of the major provincial cities Rotorua led the way with 32% growth, up 1.0% on the growth reported in January.  However, the change in property values in most of the other major provincial cities appear to be following the national trend, with Whangarei easing to 30.6%, Gisborne 20.1%, and Palmerston North 20.6%.

Main Urban Areas Commentary:

Auckland
Auckland City property values have shown growth of 10.5% over the past 12 months, down slightly from 11.4% growth reported in January.  This trend across the wider Auckland area is consistent with the national picture with almost all areas showing a marginal drop in the residential price movement.  The exceptions were the eastern suburbs of Auckland city and parts of the North Shore that continued to report increasing growth in property values.

“Although the increase in property values appears to be slowing, the drop from 11.4% to 10.5% would suggest there is no sign of a dramatic decline in the property market.” said Glenda Whitehead of QV Valuations.

Hamilton
Property values in Hamilton increased by 25.6% over the past 12 months, down from January’s 26% growth.  The average sales price was $301,976 in this period, up from $300,834 reported in January.

“Although in previous months the Hamilton market has exhibited some resilience there is now some anecdotal evidence to suggest that the market is beginning to slow, with some agents now reporting that it is becoming increasing difficult to sell some properties quickly and sale by auction currently isn’t as advantageous as it has been,” says Richard Allen of QV Valuations.

Residential property managers are also reporting that it is becoming more difficult to rent properties (particularly one and two bedroom properties) and in some instances landlords are being forced to reduce rentals in order to attract and retain tenants.

Wellington
Wellington property values have shown growth of 13.0% this month, down on the 13.3% reported in January.  The average house value in Wellington City is $428,218.

“The Wellington area is starting to show signs of easing, the only exceptions seem to be the lower priced locations which are still selling strongly,” says Max Meyers of QV Valuations. 

Property values grew in Lower Hutt by 14.6% over the past year showing some resurgence after the easing experienced between September and December 2005. 

Christchurch
Property values in Christchurch grew 17.5% over the past 12 months, down on the 20.8% recorded in January.  The average sales price for the city was $312,662.

The statistics show an easing in the growth rate for many residential area’s across Christchurch: East 18.0%, Hills 17.6%, Central City and Northern areas 16.3% and Southwest 19%. 

“There remain a large number of properties on the market, with high end properties and apartments appearing to be slower to turn over.  There has been a lot of elderly person housing developed in recent months and as a result a lot of this is now available for sale.  Well presented and realistically priced homes in the $200,000 to $350,000 price bracket form the majority of the activity and are still selling well” said Mark Dow of QV Valuations

Dunedin
Property values in Dunedin have grown by 9.8% over the past 12 months, down slightly on 10.4% reported in January.  Property listings are still at a very high level suggesting that supply and demand may be reaching equilibrium.  A shortage of supply in the past was one of the factors pushing up values. Good quality homes are still selling well, however those of inferior quality are tending to sit longer particularly if price expectations are unrealistic.

The average house value of $249,345 has reduced slightly over the city compared to last month.  This is due to fewer very high price homes selling in the last three months compared with the previous period.

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