QV: House prices holding up
August property statistics released by QV today report a 13.3% growth in national property values over the past year. Over this period, the average sale price for New Zealand properties was $394,397. Find out what is happening in the main urban areas here.
Monday, September 10th 2007, 12:00AM
by The Landlord
“Across the country, year on year growth in property values remains strong” said QV spokesperson Blue Hancock. “Reduced winter listings have been matched by less buyer activity, creating a balance in the market and resulting in prices still holding up in most areas”.
House prices across the main urban centres are at levels similar to the past few months. Auckland City’s property values have increased by 12% over the past year. Hamilton, Wellington and Christchurch all recorded growth rates above 14%.
Of the provincial cities, Gisborne 25.3% and Invercargill 34% showed further increases in annual growth and maintained their top positions in the country. Other provincial cities remained steady with Tauranga, Palmerston North and Queenstown growing at 7%, 14.7% and 11.6% respectively.
Several areas experienced easing growth rates for the period ending August. Of the main centres, the growth rate in Dunedin declined from 10.8% last month to 9.6% this month. Several provincial cities including Wanganui 13.8%, Hastings 8.6%, and New Plymouth 9.4% also experienced easing growth in property values. “With the effect of the winter market we are likely to see annual growth easing in more areas in coming months” said Hancock.
Main Urban Areas Commentary
Auckland
Property values in the Auckland region grew by 13.1% over the past year . The average sale price for the region was $504,860.
This month’s statistics continue to present a rosy picture of the residential property market for the Auckland region. The year-on-year growth rate is up on levels reported last month across the Auckland region with the exception of Franklin, which remains fairly static. Average sale prices in different cities and regions are all rising.
“Sales volumes in all areas are down, but prices seem to be holding. This scenario fits with the reports of reduced levels of listings over the winter period” said Glenda Whitehead of QV Valuations.
“Our valuers working in Waitakere city report a slowing of activity over the past 4-6 weeks. Agents are saying that there is still a reasonable number of buyers looking for property. However, the shortage of good stock along with high vendor expectations is making the sales hard work” said Whitehead. “There is evidence of properties staying on the market for 6-8 weeks. Properties at the lower end of the market and the more highly priced ones are slower to move, in comparison to the medium priced suburbs. Activity levels still appear healthy in Te Atatu, New Lynn and parts of Henderson”.
“Within Waitakere city properties that have been recently renovated seem to be selling quicker than those that are dated or "tired", with the latter sitting very long on the market, usually because the asking price is unrealistic,” Whitehead says.
“Activity in the Manukau area is down in recent months, with limited stock on the market at present. Generally it is felt that sale prices appear steady. Many people involved in the wider residential market feel that activity levels will increase as we get into the spring months,” Whitehead says.
Hamilton
Hamilton’s property values increased by 14.1% over the past year.
“The property market in Hamilton still shows its resilience with the value growth for the city higher than last month. North East 14.3% and South East Hamilton 13.1% reported slight increases in annual growth rates. However, there are signs that the market is beginning to ease with South West Hamilton dropping to 12.2% and North West Hamilton static at 12%,” Richard Allen of QV Valuations says.
“The Hamilton market’s durability is also reflected in an increase in the average sale price from $356,849 to $358,944 this month. Expectations are that sales activity will decline, however sale prices are likely to remain static rather than decrease," Allen says.
Tauranga
Tauranga property values grew by 7% over the past year. “The Tauranga property market has been stable with growth rates recorded at similar levels over the past four months,” QV's Christopher Boyd says.
“The average sale price in the city increased from $425,865 last month to $433,748 this month. This increase is a reflection of where the market activity is occurring” said Mr Boyd. “It appears that investor interest in the lower end has cooled with some investors deciding it is time to cash up”.
“Recent anecdotal evidence suggests that sales volumes and inquiry continue to slow and lending institutions are experiencing the lowest levels of activity for a number of years,” Boyd says.
Wellington
Property values in the Wellington region increased by 16.5% over the past year, similar to the level reported last month. The average sale price for the region was $448,267.
"Increases in property values have been steady in the Wellington Region, with Upper Hutt and Lower Hutt continuing to lead the market with 21.5% and 20% respectively,” says Max Meyers of QV Valuations. “The western part of Wellington City is the highest priced area with an average price of over $570,000”.
“Feedback from the market is reporting consistently low levels of sale activity across the region. Expectations are that the very buoyant figures reported for the Wellington region will soon ease in coming months. With this in mind more caution should be exercised in pricing property, as ambitious pricing is highly unlikely to be covered in the current market conditions.”
Christchurch
Property values in Christchurch increased by 14.1% over the past year, up from 13.1% reported last month. The average sale price for the city was $359,809.
“The lower end of the market dominated by first home buyers and investors is very active, which fuels the growth in the city,” says Mark Dow of QV Valuations. “Nearly 75% of Christchurch sales are in the under $400,000 bracket. Less competition and interest is seen in the upper end of the market.”
“The market in the provincial centres seems to be on a plateau with minimal difference in growth rates compared to last month. Selwyn is the only area that recorded a fall in property values from 24.5% to 21.6% this month. The general feeling is that the market will continue to flatten and growth rates will soon be easing in more areas”.
Dunedin
Dunedin’s residential property values increased by 9.6% over the past year, down from 10.8% last month. Over this period, the average sale price in Dunedin was $271,703
“The continued easing of the annual growth in the city is a reflection of the usual slow down over the winter period, rather than an indication of any significant market correction. There still appears to be a good balance between supply and demand,” David Paterson of QV Valuations says. “Expectations are that property values will continue the trend of easing as seen over the past two months.”
“Different patterns of the property growth are seen across the city. The northern city 7.3% and southern city 9.1% are growing at slower rates than last month while Taieri 12% and the coastal/peninsular location 16% report further increases in annual growth."
| « Fewer sales but good prices in September | Demand driving house prices: REINZ » |
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