Property values continue to decline: QV

QV's July statistics for the residential property market report a 2.2% decline in national property values over the past year (calculated over the three months ending July 2008 in comparison to the same period last year), down on the 0.1% growth reported in June. The average New Zealand sale price stayed steady at $393,370.

Monday, August 11th 2008, 12:01AM

by The Landlord

“Property values continue to fall across the country with almost all areas now showing values lower than they were 12 months ago. Of the main urban areas only Invercargill is showing any significant growth at 5.4%, but the trend is also slowing there.” said Blue Hancock of QV Valuations.

“The market is now well off it’s peak of late 2007, early 2008 with many sellers accepting the state of the market and dropping their expectations accordingly. As a result we are seeing an increase in activity in the market, although sales levels are still well below last year and long term averages” said Hancock. “The question has now changed from when will prices stop rising, to when can we expect to see them stabilise? This as always will be driven by market demand, and the age old factors of numbers of buyers versus numbers of sellers, and perceptions of when properties represent fair value.”

Across the Auckland area property values are 3.6% down compared to the same time last year, declining further from the -1.0% reported last month. Hamilton City’s values have slipped further to -5.4% and Tauranga to -2.6%. The Wellington area is now also showing declining values, falling from 1.1% reported last month to -1.2%. Christchurch has dropped further back to -2.1% and Dunedin to -6.8%.

Most of the main provincial centres are now showing property values less than the same time last year. Gisborne dropped sharply to -8.7% and has dropped spectacularly from the highs of last July and August where year on year values were increasing over 25%. Whangarei has declined -0.6%, Rotorua -0.4%, Napier -2.0%, Hastings -1.7%, New Plymouth -4.7%, Wanganui -1.3%, and Palmerston North -5.2%. Nelson dropped further to –2.7% and Queenstown Lakes to -3.1%. Invercargill shows year on year growth of 5.4% although this has dropped from a high of 36.4% last October and as recently as March year on year growth was at 21.9%. At the current rate of decline it will join the rest of the main centres with falling property values within a month or two.

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