Monday 12th February 2007

PROPERTY VALUES CONTINUE TO INCREASE

January residential property statistics released by QV today report 8.8% growth in national property values over the past year (calculated over the three months ending January 2007 in comparison to the same period last year), down marginally on the 9.2% growth reported in December 2006. The average New Zealand sale price increased from $348,886 last month to $356,028 this month.

“Looking back over 2006, we reported annual increases of 16.8% in January last year. The 8.8% reported this month, whilst still a healthy rate of increase, does reflect a gradual easing in pressure on property prices” said QV spokesperson Blue Hancock.

“A number of provincial areas continued to show strong growth, with 25 areas exceeding 15% growth per annum. In most of these areas, the average sale price is $150,000 to $250,000, compared with a New Zealand average sale price above $300,000” said Mr Hancock. “Strong migration figures, a stable cash rate and lower unemployment figures are all contributing to a continuation of higher prices in the residential market”.
 
Of the main urban centres, Auckland eased to 4.5% whilst Hamilton rose from 9.7% last month to 11.7% this month. Wellington 9.7%, Christchurch 9% and Dunedin 6.2% were consistent with growth rates reported in December 2006.

Among provincial cities,  Hutt City 17.3%, New Plymouth 8.5%, Queenstown 5.8%, Hastings 2.7% all recorded similar rates to last month. Gisborne and Wanganui, although easing slightly, were still at very strong rates of 26.5% and 14.8% respectively.

Main Urban Areas Commentary:

Auckland:
Auckland City’s property values increased by 4.5% (calculated over the three months ending January 2007 in comparison to the same period last year) but the breakdown within the areas differs significantly.  “Auckland Central, which encompasses from Pt Chevalier across Ponsonby, Herne Bay and to the CBD area and Parnell, showed just 0.1% growth, with an average sale price of $502,892.  This area encompasses both high value property within the suburbs, and the high sales volume but lower value apartments in the CBD.  The Eastern Bays incorporating Epsom, Remuera and the Bays through to Glendowie showed more buoyancy at 7.5%. The remaining areas showed 5.4% growth and an average sale price of $459,053” said Glenda Whitehead of QV Valuations.

Rodney’s growth has eased to 9.1% after its spring zeal to a slightly lower average sale price of $483,012. North Shore’s value growth has been steady throughout the later half of 2006, now showing year on year growth of 6.1% with a slight jump in the average sale price to $545,417.

Manukau City showed overall growth of 9.7%.  The North West area encompassing Mangere Bridge, Mangere, Otara and Papatoetoe was the strongest performing area at 14.4% with East and Central areas 7.5% and 8.5% respectively.  “Our valuers comment that at present well priced properties are selling within relatively short periods, with seemingly increased market activity and buyer demand after the return from holidays” said Whitehead.

Waitakere City has shown year on year growth of 7.2%, and continues to be a steady market.  “Demand in the cheaper areas such as Ranui, Glen Eden, and Kelston appears to be slowing, while medium to high value areas like Te Atatu, Henderson, West Harbour and Titirangi are still attracting fairly good demand.   Time on the market has pushed out a little further, as people are having a good look around before making offers” said Whitehead.

Hamilton:
Hamilton’s property values have showed growth of 11.7% (calculated over the three months ending January 2007 in comparison to the same period last year), up from 9.7% reported in December 2006.  The average sale price in Hamilton was $328,623.

“The statistical evidence indicates that demand for residential property and growth in all parts of Hamilton strengthened in January. This is evidenced by the latest QV statistics which showed an increase of 2% in growth rate from December 2006 to January 2007 for Hamilton City. The increase reversed the trend of easing growth rates over the past year” said Ross McFarlane of QV Valuations. “Sales activity has also improved quite substantially and the average sale price in Hamilton has risen to nearly $330,000 after hovering near $320,000 for the past six months”.
 
Tauranga:
Tauranga property values grew 2.4% (calculated over the three months ending January 2007 in comparison to the same period last year), down from 3.4% reported last month. 

“January 2007 is the first month since September 2006 that the annual growth rate in Tauranga property values has decreased. It is too early to suggest a trend of easing prices, especially in light of the current market conditions with realistically priced homes selling well and a firm level of activity” said Christopher Boyd of QV Valuations. “Although the average house price has decreased slightly from last month, it was still very high at $407,926”.

Wellington:
Property values in Wellington City increased annually by 9.7% (calculated over the three months ending January 2007 in comparison to the same period last year), up from 9.3% reported last month. The average sale price for the city was $464,895.

"The wider Wellington market continues to move ahead with no sign of easing. The number of transactions persists at high levels. Properties are selling quickly and in most areas, prices have increased.  The Hutt Valley leads the market with annual value growth over 17% whilst Kapiti and Porirua are holding at about 13%. Wellington City, though at a lower rate of 9.7%, has an increase of $15,000 in the average sale price from last month, second only to Kapiti with a $19,000 increase” said Max Meyers of QV Valuations. “Clearly this is a strong market that is not expected to change significantly in the short term”.

Christchurch:
Christchurch property values increased 9% over the past year (calculated over the three months ending January 2007 in comparison to the same period last year). This is the third consecutive month QV’s figures show annual increase of 9%.

“Most of the markets across Canterbury and Westland were stable in January” said Mark Dow of QV Valuations. “The general trend of a stable market was also reflected in the provincial areas”.

“Within Christchurch City, the Eastern suburbs showed annual growth moving from an 8.5% in December 2006 to 9.5% in January 2007. This lines up with anecdotal evidence of a healthy market in this part of the city. Contrasting with this is a decline in year on year movements for the hill suburbs moving from 9.4% in December to 5.9% in January. However, it is too early to determine if this is a downward trend for the hill suburbs” said Mr Dow.

Dunedin:
Dunedin residential property values increased by 6.2% (calculated over the three months ending January 2007 in comparison to the same period last year), up slightly from 6.0% last month.  The average sale price in Dunedin was $263,111.

“The market in Dunedin is very much steady as she goes. The pleasing aspect is that there is still positive growth at a level that is far more sustainable than what was recorded in the 2004/2005 period” said David Paterson of QV Valuations. “Demand appears to be strong in the first home and investment market up to $300,000, which accounts for 75% of the residential sales in Dunedin. There is a number of listings for higher priced properties and the perception is that demand for these has eased somewhat in recent months”.

“For the period ending January 2007, growth is steady across all areas in Dunedin, with the Peninsular/Coastal part of the city experiencing the highest increase in the growth rate from 8.4% last month to 10.7% this month” said Mr Paterson.

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