Tauranga stays on top
The latest Quotable Value statistics for March show Tauranga as the only city with increased growth. We look at house price growth of all the main urban centres in the latest period.
Monday, April 14th 2008, 5:00AM
by The Landlord
Main Urban Area Commentaries
To find out what is happening in your area use these links:
Auckland
Hamilton
Tauranga
Wellington
Christchurch
Dunedin
All statistics are calculated over the three month period ending January 2008 in comparison to the same period last year.
Property values in the Auckland region increased by 7.1% over the past year. The average sale price for the region decreased to $516,253 compared to $518,085 recorded last month.
"All seven cities and districts making up the Auckland region showed an easing in the year-on-year growth rates from March 2007 to March 2008. Year-on-year growth rates now range from 5.1% recorded for Papakura to the regional high of 9.8% in Rodney. Average sale prices varied on levels reported last month" said Glenda Whitehead of QV Valuations.
"Throughout the region, residential property is taking extended periods to sell, with 6 to 12 weeks not uncommon. Some buyers are making low offers to take advantage of those who need to sell. Vendors who are not desperate to sell are withdrawing their properties from the market, refinancing and renting them out instead. We are also seeing more price based marketing, as auctions struggle to get interest" said Whitehead.
"Auckland City’s annual growth rates eased to 6.2%, while the average sale price rose slightly to $595,942. Again listing levels are high, and it appears to be only the motivated vendors that are meeting the market. Negative media reports are helping create a stalling effect in the market, as participants take a wait-and-see approach. Banks are reporting limited levels of new lending, leading to some banks relaxing criteria to win business while others are tightening their criteria. A positive outcome amongst the more gloomy reports of the apartment market is that car parks are still in demand, with the price of a car park on a separate Title still around $60-65K in CBD" said Whitehead.
"On the North Shore, while the annual growth rate eased to 7.9% the average sale price rose to $604,469. This confirms word on the street that while property on the Shore is taking longer to sell, as a whole values appear to be holding" said Whitehead.
"Waitakere City, which has been a very steady market in recent times, saw its annual growth rate slip 1.5% to 7.9%. This rate is now at a similar level to February 2007. Our valuers report large numbers of listings, with low levels of interest at open homes, and discerning buyers. There is still a gap between vendor and buyer expectation, with only the realistic and motivated vendors successfully selling. There is very little activity from investors, with some now placing their properties back on the market as they struggle with the higher interest rates" said Whitehead.
"As is the case throughout the Auckland region, the South Auckland property market has also slowed down in recent months. Agents are reporting properties being listed for well over 6 weeks. Sales volumes in the lower priced suburbs such as Papatoetoe, Otara, and Manurewa are somewhat more buoyant than the traditionally more sought after suburbs like Pakuranga, Howick, Dannemora, and Highland Park" said Whitehead.
Property values in Hamilton increased by 3.4% over the past year. The average sale price for the city was $359,668, down from $360,879 in February.
The continued decline in sales volumes, a good supply of properties on the market, the impact of increasing interest rates, and decreasing immigration continued to put downward pressure on residential property values in the city" said Richard Allen of QV Valuations.
"Hamilton’s residential property growth statistics for March continued to slide reaffirming the easing growth we have seen in the early part of 2008. The significant decrease in property value growth seen over the last couple of months continued, as did the decline in average sale prices recorded for most parts of the city.
"Annual property value growth for the whole city in March decreased to 3.4% from 6.1% in February. The Central City/North West area of Hamilton decreased to 2.7% from 4.5%, the South West to 3.4% from 5.5%, Hamilton North East to 3.3% from 6.6%, and South East Hamilton to 3.2% from 5.8%. The average sale price in the city decreased for the fourth consecutive month easing slightly from $360,879 to $359,668" said Allen.
"With demand continuing to soften in most areas it will be interesting to see what impact the downward pressure will have on the average sale price in the next couple of months. At this stage expectations are that sale prices are likely to fall a little more before leveling out" said Allen.
Tauranga’s residential property values increased by 3.7% over the past year, up from the 2.9% reported last month. The average sale price in Tauranga increased slightly to $423,407.
"Tauranga was the only one of the main centres to show an increase in the year on year growth in values compared to last month. While the market is clearly subdued, it is too early to conclude that it is a buyers market. It is not the ideal time to sell, but nor is there evidence to suggest that it is an attractive environment for buyers either" said Shayne Donovan-Grammer of QV Valuations.
"Property stocks are building up quite rapidly as more properties are listed but few are selling. The build up should inevitably lead to a softening in prices, particularly for those sellers who have to move on" said Donovan-Grammer.
"The apartment and quality townhouse markets in both Tauranga and Mount Maunganui have been particularly hard hit. In the apartment market there is such a dis-interest that a good portion of properties that have changed hands involve trades with other residential property. In the inner suburbs of Tauranga, in an area such as Pillans Point, a number of townhouses in the $600,000 to $900,000 category have been on the market for over a year, some approaching two years" said Donovan-Grammer.
Property values in the Wellington region increased by 8.1% over the past year, down from 10.0% reported last month. The average sale price for the region decreased from $457,530 last month to $440,483 this month.
"The year on year change in values is now at its lowest level in three years showing an increase of only 8.1%. More significantly, this has dropped from the high of 16.5% seen last August, and this downward trend is being confirmed by the dialog our valuers have with their daily contacts. If this trend continues then it is likely that parts of the region will show declining values before the end of the year" said Max Meyers of QV Valuations.
"All the areas within Wellington have shown easing annual growth rates and average sale prices. Across the region, Upper Hutt showed the greatest change in annual growth rates, dropping to 10.1% from 13.4%. Porirua also eased to 10.2% with average sale prices similar last month at $402,653. Kapiti eased to 10% and Hutt to 8.3%" said Meyers.
"Within Wellington City, the Eastern Suburbs showed the greatest easing in annual growth rates, dropping to 5.5% from 8.0% reported last month. North Wellington eased to 7.9%, while both the Western suburbs and Wellington City and Southern Suburbs both eased to 7.7%" said Meyers.
"Some areas and types of properties will be more affected by changing values than others. Well presented properties in good condition are holding their value well. The market is still reasonably active, but there are fewer transactions than last year and sellers have to be prepared to negotiate to achieve a sale" said Meyers.
Property values increased by 5.8% in Christchurch over the last year, down from 6.1% reported last month. The average sale price for the city improved slightly from February, being $365,665 in March.
"The softening of the housing market continues. The volume of sales is well down on previous levels and we are now seeing clear signs that some property types are achieving lower sale prices than they would have six months ago. The difficulty the property market is experiencing is well reported and it would appear that this negativity is adding to purchasers’ reluctance to commit to buying a property" said Mark Dow of QV Valuations.
"While the year on year sales price statistics don’t indicate any major issues with the market, it is the low sales volumes and recent ‘coal face’ information from agents and valuers that paint a picture of a market that will struggle over the winter months" said Dow.
Dunedin’s residential property values increased by 2.2% over the past year, down from 5.3% reported last month. The average sale price in Dunedin was $276,186.
"The downward trend in growth reported over recent months shows no sign of levelling out and there is nothing on the horizon that is likely to reverse this trend as we move into autumn and winter. The general economic outlook is not particularly positive and this is impacting on the property market just as it is with other investment markets" said David Paterson of QV Valuations.
There has been anecdotal evidence of prices easing for some time now. This month's value growth statistics are also showing some negative growth in parts of the city for the first time. The growth in the southern city area for example was -1.4%. This is an indication of what we may see over the city as a whole in the months ahead. The other areas all still show positive growth on the same period in 2007" said Paterson.
"There are large numbers of properties on the market at present. While houses are still selling, there appears to be insufficient demand to match supply" said Paterson.
| « REINZ residential highlights - February 2008 | Further signs property values easing » |
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