Prices hold but fewer buyers and listings
QV’s June statistics show growth in national property values at 12.2% over the past year; an increase from the 11.1% reported in May.
Monday, July 9th 2007, 12:00AM
by The Landlord
The average sale price was $378,672 for this period.
QV spokesperson Blue Hancock says, “The feedback from the market is that there is a slowdown in activity, with fewer buyers and listings in many areas”.
“However, the prices buyers are paying still appear to be holding up. Continued activity in the lower priced segment has contributed to the current strong market.”
“Reports around the country are that sellers’ price expectations remain high, while buyers are exercising a degree of caution.”
All the main urban areas reported higher growth in property values compared to last month. Auckland grew by 9.9%, up from 7.5%. Hamilton, Wellington and Christchurch all experienced growth above the national average. Property values in Dunedin increased by 11.4% over the past year.
The trends varied across the provincial cities. Strong performers were Invercargill: 28.2% and Gisborne: 20.7%, which reported higher growth rates compared to last month. Wanganui and Manawatu remained stable at 14.1% and 21.8% respectively. Growth eased slightly in Tauranga and New Plymouth, to 6.6% and 11% respectively.
Main urban areas commentary:
Auckland:
Property values in the Auckland region grew by 11.2% over the past year, up from 9.5% reported last month. The average sale price for the region was $492,857.
QV statistics for the Auckland region continue to show increases in annual growth compared to last month in all districts and cities apart from Papakura and Franklin. Year on year growth rates increased to 12.7% in Rodney, 12.6% on the North Shore, 11.6% in Waitakere, 9.9% in Auckland city, and 12.6% in Manukau. Papakura and Franklin eased to 10.6% and 9.8% respectively.
Glenda Whitehead of QV Valuations says, “Good activity levels continue in the more affordable or first homebuyer areas, and also at the discretionary end of the market, where perhaps decisions are less bound by borrowed finances”.
“However, over the past month, our valuers have been noting a change in market attitude. There has been varied market feedback throughout the region including fewer listings reported by agents, caution surrounding investment, and investors knowingly purchasing with the expectation of lower yields on residential properties.”
“There seems to be a growing gap between vendors’ expectations and purchasers’ willingness to pay. There is a general feeling that people are holding back a little, both homebuyers and investors,” says Whitehead.
“At this early stage it’s more a feel than a fact. Spring will be the telling point on whether or not this is just the winter chills or a more substantial shift in the residential property market.”
Hamilton:
Hamilton’s property values increased by 13.3% over the past year, from 11.8% last month. The average sale price for the city was $354,461.
Richard Allen of QV Valuations says the residential property market continues to remain resilient. “Demand for residential property in Hamilton seemed to grow in June with property values increasing at a higher level than reported last month. Across the city, northeast Hamilton experienced the strongest annual growth of 14.1%. Other areas recorded slightly lower growth, but still at very healthy rates with southeast: 12.1%, central/northwest: 12.4% and southwest: 13.2%.”
Tauranga:
Tauranga property values grew 6.6%, similar to the growth rate reported last month (6.7%).
Christopher Boyd of QV Valuations says, “The Tauranga property market is presently stable with values growing at consistent rates over the past couple of months. There was an improvement in the average sale price from $417,124 last month to $419,556 this month”.
“Recent anecdotal evidence suggests that sales volumes and inquiry has dropped off significantly and the market is beginning to slow.”
“Smaller peripheral markets to Tauranga such as the Omokoroa Peninsula have been quiet for a while, with vendors having to lower their expectations to achieve a sale,” says Boyd.
Wellington:
Property values in the Wellington region increased by 15.8% over the past year. The average sale price for the region was $422,568.
Max Meyers of QV Valuations says, “The property market in the Wellington region continues to strengthen. Hutt City is leading the market with 18.5% growth in property values, followed closely by Upper Hutt at 17.9%”.
“Wellington city has property values growing at 14.5%, up from 13.3% last month. Even the slowest growth seen in the central/southern part of the city is still very high at 13.4%, with an average price of $501,776. Apartments are a large part of this market and price increases have been relatively low in the past because of the availability of new buildings. However, the escalating cost of new apartment buildings is now beginning to have an effect,” says Meyers.
“Overall, winter conditions have affected the number of sales in a typical seasonal pattern, but property is still selling very quickly, and prices are still at a very high level.”
Christchurch:
The Christchurch market continued to strengthen with residential property values growing at 13.4%; an increase from the 12.4% reported in May.
Mark Dow of QV Valuations says “There were some signs of hesitation in the market in early June after the increase in the official cash rate and the possibility of tax advantages for property investment being removed. However, QV statistics indicate that the market is still very strong, driven mainly by the lower priced housing segment and investors’ confidence. Many investors are of the opinion that the removal of tax advantages is unlikely to occur”.
“In Christchurch city, the eastern and south western suburbs have scored the highest increases in growth rates compared to last month at 15.5% and 14.6% respectively, while the Hills were quite stable at 14.1%, as was the central city and north at 11.5%,” says Dow.
“However, there are some signs of a slowing market with sales volume reducing in some provincial areas. We have also noted a number of homes struggling to be built for less than their completed market value due to increasing land prices and the costs of construction.”
Dunedin:
Dunedin’s residential property values increased by 11.4% over the past year, up from 8.7 % last month. The average sale price in Dunedin was $268,719, up slightly on the previous month’s $265,097.
David Paterson of QV Valuations says, “Despite predictions of a softening in the market and pressure from higher interest rates, residential property values have continued the upwards trend of the last few months. Growth has been reasonably consistent across the city, with most areas showing slightly higher growth rates compared to last month. The central and northern parts of the city record the highest growth at 13.8%”.
“Agents are noting good demand for most property types and those that are realistically priced are selling quickly. There are reports that the higher price market is also becoming more active with a number of $1 million plus sales in the pipeline.”
| « Auckland property prices steady in July | Rental property tops with investors » |
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