Monday 10th April 2006
Property Market Slowing
QV’s March property statistics released today indicate that New Zealand residential property values increased by 14.8% over the past twelve months, down from the 15.3% reported in February.
“The national annual growth rate is the lowest since the 14.5% growth reported in October last year, and is the second straight month of a slowdown in the annual growth rate.” says QV spokesperson Mark Dow.
“Although we’re reporting a slowdown in the growth rate, there isn’t any area in the country where we are seeing falls in property values compared to the same period 12 months ago. It just reflects slowing market activity where demand is less and there isn’t the same pressure on buyers to keep pushing prices up at the levels we’ve seen over the past couple of years” said Mr Dow.
Dunedin was the only main centre that recorded an increase in growth compared to last month, with a growth in property values of 10.4% up from 9.8%. The other main centres all saw slight falls in the growth rate, with Hamilton properties growing in value by 25.1%, Christchurch 15.9%, Wellington 12.6% and Auckland 9.4%.
Of the major provincial cities Whangarei 29.9%, New Plymouth 14.7% and Napier 13.6% all followed the national trend of marginal falls in their annual growth rate, however, Invercargill with 13.9% and Palmerston North 20.9% both bucked the trend and experienced an increase in the annual percentage growth.
Main Urban Areas Commentary:
Auckland:
Auckland City property values have shown growth of 9.4% over the past 12 months, down slightly from 10.5% growth reported in January. The average sales price was $510,117.
The Rodney district continues to show relatively steady growth of 9.0%, with minor monthly variations in recent times. Likewise North Shore continues to be a popular place of residence, with the coastal areas performing the strongest.
Waitakere has now been a persistent performer showing similar growth levels for the past 10 months around the 11.0-12.0% growth rate. This creates a level of certainty for those who are active in this market and will help it to continue to perform at these levels going forward.
“Auckland City after rebounding in January is now easing again. This, once again, could be reflective of the higher value levels in this city, and consequent reduced affordability” said Glenda Whitehead of QV Valuations.
The southern cities (Manukau, Papakura and Franklin) have been strong performers with annual growth rates in the 14-17% range. The average house prices in these areas reflect a more affordable housing stock. We continue to see the greatest level of activity in the Auckland region in the under $500,000 bracket.
Hamilton:
Property values in Hamilton increased by 25.1% over the past 12 months, down from February’s 25.6% growth. The average sales price was $316,138.
“Although in recent months the residential property market in Hamilton has exhibited some resilience the statistics and anecdotal evidence suggests that the demand for most types of residential property in Hamilton is beginning to ease. The growth reported in this period is the lowest since July 2005.” says Richard Allen of QV Valuations.
Hamilton Central appears to be most affected by the decreased growth rate this month reporting 25.4% growth down from 27.5% reported in the 12 months ending February.
Wellington:
Wellington City’s property values have shown growth of 12.6% over the past year, down on the 13.0% reported in February. The average sales price in Wellington City was $427,960, down slightly on $428,218 reported in February.
“Although the average sales price is down on last month it is still $30,000 above the same time last year. It is evident that there remains strong buyer interest with the lower priced areas showing the highest price increases.” says Max Meyers of QV Valuations.
Upper Hutt had the highest growth rate of 19.4% over the past 12 months. The lowest increases were evident in the higher value areas (the eastern and western suburbs of Wellington city) but these are still showing a steady 10.8% and 11.8% increase over the last year.
Christchurch:
Property values in Christchurch grew 15.9% over the past 12 months, down on the 17.5% reported in February. The average sales price for the city was $320,549, up from $312,662 reported in February.
“The trend of prices easing in the upper price bracket continues. This has been particularly evident in the Hill suburbs and popular Central and Northern suburbs of Christchurch. The general trend over the smaller towns and settlements in Canterbury and Westland has been for a slight easing in price. The $200,000 to $300,000 price bracket remains the most active for Christchurch City.” said Mark Dow of QV Valuations.
With the easing in property values real estate agents in the Christchurch area are reporting that it is becoming more common for sale contracts to be subject to the sale of another property.
Dunedin:
Property values in Dunedin have grown by 10.4% over the past 12 months, up from the 9.8% growth reported in February. This level of growth is similar to what was reported in January.
“The statistics for Dunedin show a slight increase compared to last month. As with last month there remain a high number of properties on the market with a reducing number of prospective buyers. Vendors have to be more realistic with asking prices to meet the market and buyers have a greater choice so they can be more selective with their purchases.” says David Paterson of QV Valuations.
The average house price of $250,293 has increased slightly over the city compared to last month, so there is no indication that the increased availability of houses for sale has had any significant impact on prices.
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