QV commentary shows Wellington on top
Wellington has shown the best house price growth of all the main urban centres in the latest period, according to the latest Quotable Value statistics.
Monday, January 14th 2008, 12:00AM
by The Landlord
Auckland:
Property values in the Auckland region increased by 10.8% over the past year (calculated over the three months ending December 2007 in comparison to the same period last year). The average sale price for the region was $511,188.
"December activity can either be manic or quiet. December 2007 was at the quieter end of the scale. Our valuers observed steady levels of activity comparable to previous months. Buyers continue to be cautious, with most doing plenty of homework before making an offer. Some areas in West Auckland are ticking over fairly steadily while others have definitely slowed down. Popular suburbs include New Lynn, Te Atatu Peninsular, Te Atatu South, and West Harbour. Slower areas are Ranui, Glen Eden, and Massey. Other parts of Auckland also showed patchy activity," said Glenda Whitehead of QV Valuations.
"During December annual growth rates in the Auckland region continued to ease. Yet it is hardly surprising that with growth still in the very positive territory of between 9% and 12% many areas reported increases in average sale prices. In our day to day work, more recently we have seen a levelling out of values in many areas, as the effect of reduced buyer enquiry impacts" said Whitehead.
"Rodney (12.4%), Waitakere (12.3%) and Manukau (12.6%) topped the growth rates with North Shore (11.8%), Papakura (10.3%), and Auckland City (9.1%) all easing just slightly on the figures reported last month. Franklin recorded the lowest annual growth rate for the area at 8.4%, down from 10% recorded last month" said Whitehead.
Valuers noted a decline in the number of properties being marketed by auction, with marketing periods for many properties now lengthening.
Factors influencing the market include:
*A perception that we are shifting from a sellers market to a buyers market
*Uncertainty in the market place affecting the confidence of purchasers
*Investors selling up and cashing in on capital gain
*Higher interest rates affecting affordability and investment returns
*Overall, property being less affordable and pushing potential purchasers out of the market.
Hamilton:
Hamilton’s property values increased by 11.8% over the past year (calculated over the three months ending December 2007 in comparison to the same period last year). The average sale price in the city decreased to $364,013 (from $367,660 reported last month).
"Declining sales volumes, the impact of increasing interest rates, and decreasing immigration have finally impacted on Hamilton’s residential property growth statistics in November and December. Most parts of the city showed a significant decrease in property value growth," said Richard Allen of QV Valuations.
"The Central City/North West area of Hamilton decreased from 13.5 % in November to 10.5% in December. The South West decreased from 12.9% to 10.9%, Hamilton North East decreased from 15.3% to 12.8% and South West Hamilton decreased from 12.9% to 10.9%. However, what is more significant is that the average sale price in the city decreased from $367,660 to $364,013. The first time in twelve months there has been a substantial decrease in this measure, driven by a substantial decrease in the average sale price in North East Hamilton from $467,593 to $450,454" said Allen.
"With demand continuing to soften in most areas it will be interesting to see if there is further pressure on prices. However, at this stage expectations and the general feeling is that sale prices are likely to remain static rather than decrease," said Allen.
Tauranga:
Property values in Tauranga City increased by 5.0% (calculated over the three months ending December 2007 in comparison to the same period last year), down on the 5.4% reported for November. The average sale price for the city was $443,399, only a 1.0% increase on last month.
"The property market in the region continues to be generally quiet with a modest downward trend in the rate of increase over the last three months. The data for Tauranga mirrors evidence from many other parts of the country" said Russell Oliver of QV Valuations.
"Anecdotal evidence indicates that despite a reasonable level of buyer enquiry, there are difficulties in closing the sale due to unrealistic expectations by vendors. Prospective purchasers are more cautious partly due to the increased cost of borrowing. Homeowners refinancing will face tougher times ahead due to the recent hikes in fixed interest rates. Properties with less desirable features such as appearance and location tend to be more difficult to sell in current market conditions," said Oliver.
Wellington:
Property values in the Wellington region increased by 12.1% over the past year (calculated over the three months ending December 2007 in comparison to the same period last year), down from 13.6% reported last month. The average sale price for the region increased to $438,416.
"The outlying areas of Wellington recorded the biggest declines in property growth this month. Lower Hutt reported the greatest easing at 12.1% (16.1% last month), followed by the Kapiti Coast, decreasing to 12.1% this month (from 15.3% last month). Porirua's growth in property values dropped 2.4% to 13.4% (15.8% last month) and Upper Hutt also eased to 15.3% (from 17.5% last month)" said Max Meyers of QV Valuations.
"The Eastern suburbs climbed from 11.3% to 11.8%, the only area in Wellington City to report an increase in property value growth this month. The Western suburbs recorded a slight easing in growth rates from 14.7% to 14.3%, and the Southern suburbs decreased from 11.7% to 11.4%. Growth in property values in the Northern suburbs remained relatively static at 10.9%" said Meyers.
"In the Wellington region there has been an obvious increase in the number of properties for sale and combined with a limited pool of buyers is a clear indicator of a buyers market; although there are some areas still enjoying steady demand. Higher interest rates are also having a definite impact on the market slowing," said Meyers.
Christchurch:
Property values in Christchurch increased by 8.2% over the past year (calculated over the three months ending December 2007 in comparison to the same period last year) down from 9.9% reported last month and 12.3% recorded in October. The average sale price for the city was $361,912 up from $359,891 reported in November.
"Another month of decline in the annual growth rate confirms a contraction in the local housing market. Sale volumes continue to trend down and the only gain to be seen from the traditional upbeat summer market is a small increase in the average sale price over the previous month" said Richard Kolff of QV Valuations.
"Sale periods are continuing to increase with well presented, lower to medium priced properties being the quickest to sell. Vendors of overpriced property no longer have the advantage of a fast growing market to catch up to their asking price. Those that have not reacted to the slow down risk their properties sitting and then being discounted heavily to compensate for staying on the market too long," said Kolff.
"The strong performing provincial centres of Waimakariri and Selwyn are continuing to hold their own, both having a slight increase in annual property growth. Banks Peninsula, Ashburton and Timaru have all seen their annual growth rate slip," said Kolff.
Dunedin:
Dunedin’s residential property values increased by 6.9% over the past year (calculated over the three months ending December 2007 in comparison to the same period last year), down from 8.5 % reported last month, continuing a trend seen over the last four months. The average sale price in Dunedin was $275,540.
"The residential market has shown considerable resilience over the last twelve months. During the first six months of 2007 growth in property values increased from 6.2% in January to peak at 11.4% in June. During this period there were a series of interest rate rises as well as significant increases in the cost of living, and it took some time for these to impact significantly on the property market. From July 2007, property value growth started to decline to a point where it is now at a similar level to January 2007" said David Paterson of QV Valuations.
"The latest statistics continue to reinforce the prediction that property value growth will continue to level off over the next few months. Real estate agents are still reporting some confidence in the market and it will be interesting to see if this confidence results in a strengthening of the market over the long term" said Paterson.
"Invercargill continues to show strong growth, however for the first time in some months the rate of growth has declined to 29.4% (down from 34.8% in November). The average residential sale price in Invercargill has remained relatively flat over the past few months, hovering around $207,000" said Paterson.
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