House prices down and expected to keep falling

The latest house price statistics from QV show prices are down again, and the expectation is that declines are set to continue for some time yet.

Monday, June 9th 2008, 12:00AM

by The Landlord

QV says residential property prices nationally were 2.4% than a year ago, however this growth figure is down on the 4.9% growth reported in April.

It says the average sale price decreased slightly to $387,299.

“While most areas are still holding their value from a year ago, some areas are beginning to report small declines” QV Valuation’s Mark Dow says. “Whether properties are holding their value or being sold beneath previous expectations is being influenced by how much pressure the owner feels to sell. There are increasing reports that where sellers aren’t under financial pressure or needing to relocate, they are choosing to take their properties off the market or rent them out rather than accept lower offers.”

QV’s preliminary statistics, and feedback from its valuers, suggest that this decline is set to continue for some time yet, Dow says.

“Buyers have a luxury they haven’t experienced for a number of years where there is far less pressure to make a quick purchase decision. Buyers can now benefit more than ever from doing their research in order to make the most informed decision possible,” he says.

Prices continue to slow in the main urban centres. Most of the main provincial centres are showing annual growth rates less than those reported last month. The exception is Wanganui which increased slightly to (2.1%).

Across the Auckland area property values are 1.8% above the same time last year, down from the 4.7% reported last month. Hamilton City’s annual growth has eased from 2.3% to 0.5% and Tauranga from 3.5% to 1.1%. Wellington area’s growth of 3.7% is the highest of the main urban centres. Christchurch is showing 1.9% annual growth, while Dunedin remains the only main centre to show annual property values less than the same time last year at -2.2%.

In the big provincial centres Whangarei (2.2%), Rotorua (3.3%) and Nelson (1.2%) all eased back. Gisborne (-1.1%), New Plymouth (-1.8%) and Palmerston North (-0.3%) are now showing lower values than the same time last year.

Queenstown lost the gains of the previous two months in dropping 6.3% to 1.1% annual growth. Invercargill again remains the city with the highest annual growth rate, now 15.3%.