Main urban areas commentary: QV
To find out what's happening in the main areas around the country, use the links in the story below.
Monday, December 8th 2008, 12:59AM
by The Landlord
To view your region quickly:
Auckland
Hamilton
Tauranga
Wellington
Christchurch
Dunedin
All statistics are calculated over the three months ending November 2008 in comparison to the same period last year.
Auckland
Property values in the Auckland region declined by 7.4% over the past year, a slight improvement on the 7.7% decline reported in October. The average sale price for the region decreased slightly to $494,136.
Glenda Whitehead of QV Valuations said; “The news in the wider Auckland market is a mix of good and not so good. In Waitakere City, our valuers are noting a few more sold signs around, and that recent sale prices appear to be at similar levels to those achieved in October and early November. This could be a sign of the market levelling off, but until we see a couple more months of similar activity, it is too early to call. The average sales price is now well down from the peak which occurred in the third quarter of 2007, with some properties down 7 to 10%.
“In the west, we are observing that there are quite a few homes on the market that were purchased in recent years for investment purposes. This is possibly a reflection of investors having second thoughts, just wanting to get out while they can, perhaps before they are pushed,” she said.
“Buyer interest appears to have increased in most areas. This increased activity is much later than usual, but we welcome a summer surge given that spring had no bounce. Buyers are however certainly trying to secure a bargain. The high proportion of mortgagee sales has set price benchmarks in some areas of the market. Parts of the CBD apartment market are definitely in this category, along with other areas such as Dannemora and Clendon. Buyers are able to test vendor reaction by presenting low offers, if accepted this effectively caps market values for everyone,” Whitehead also said.
“Unique properties located in desirable areas are faring a little better, but the supply and demand equation remains out of balance in most areas. For example, South Auckland market values have fluctuated considerably since the beginning of 2008. Eastern suburbs have declined as well, but at a slower rate. Properties in these suburbs have also taken much longer sell” said Whitehead.
“As many owners are unable to sell their properties at agreeable levels, they have decided to rent them out. Properties are now staying vacant for longer, due to increased supply and tenant choice. As a result we expect rental prices to fall over the next quarter.
“Although interest rates are dropping, home buyers are uneasy about the 20% deposit required by some banks. Some think it unlikely that first home buyers will enter the property market any time soon. Confidence is also lacking in the wider market, with job security in the back of peoples minds” said Whitehead.
Hamilton
Property values in Hamilton declined by 8.5% over the past year, a slight improvement on the 9% decline reported in October. The average sale price for the city declined slightly to $345,785.
Richard Allen of QV Valuations said; “The South East area declined 8.3% in November, a slight improvement on the 9.7% decline reported in October. We are seeing the same pattern in the South West and Central City/North West, which declined by 8.0% and 10.9% respectively in November. The decline in Hamilton North East continues at the same level of 7.8%”.
“There is a reasonable indication that after months of accelerated decline, property values in Hamilton City have started to level off over the past few months. The value of the residential property market is now similar to that experienced in January 2007” said Allen.
“Even though interest rates are falling, there is still a lack of confidence in the market which is stifling demand. There is plenty of anecdotal evidence to suggest that the market continues to strongly favour buyers. This is reinforced by the average sale price for the city which retreated from $349,253 October to $345,785 in November,” he said.
Tauranga
Property values in Tauranga declined by 8.4% over the past year, down further from the 7.9% decline reported in October. The average sale price decreased to $430,464.
“The local market is still going through a tough period. While there is a bit more optimism leading into the summer months, the predicted increase in activity has not yet eventuated. The pool of buyers has somewhat diminished, and has probably reduced even further due to the tighter lending criteria imposed by major banks,” Shayne Donovan-Grammer said.
“It appears that sensibly priced, good quality properties in sought after suburbs are maintaining their value well. Perhaps buyers think there is more stability and security in these areas” Donovan-Grammer said.
“2008 has been a turbulent year for property, with 2009 likely to follow suit. In my view, 2009 will come down to a tussle between lower interest rates and perceived job security, which will dictate the direction of the market,” he said.
Wellington
Property values in the Wellington region decreased by 6.0% over the past year, a very slight improvement on the 6.1% decline reported in October. The average sale price for the region decreased slightly to $411,922.
“Early signs that the Wellington market may be beginning to steady are slowly emerging, possibly as a result of changing interest rates. Generally, buyers are starting to show more curiosity. The indications are; steadier prices in the last two months, and shorter selling times over the past four months,” Max Meyers of QV Valuations said.
“The highest average sale price is in the Western Suburbs at $540,000, a level last seen in June 2007. The area with the lowest average sales price was Upper Hutt at $317,000, back to the February 2007 level. Overall, the average sale price in the region has declined $13,507 compared to the same period last for the year,” he said.
“A further reduction in interest rates will help the market to steady itself, and will provide good buying opportunities over the next few months. The extent to which the global economic crisis will impact the local property market is dependent on how severely the entire New Zealand economy is affected. Regardless of the extent, it is likely to limit growth in the short to medium term,” said Meyers.
Christchurch
Property values in Christchurch decreased by 7.4% over the last year a slight improvement on the 7.8% annual decline reported in October. The average sale price for the city increased slightly to $355,828.
; “The change in property values over the last couple of months show that the trend of rapid decline may be easing. While sales volumes are still very low, the average sales prices appears to have stabilised recently,” Mark Dow said.
“It is still too early to break out the champagne to celebrate a turn around in the property market. Property values are still below where they where a year ago, but we have now had a couple of months where declines have not deteriorated” said Dow.
“The sharpest increase in the rate of decline (year on year) occurred in the Hill suburbs; from -4.6% recorded in October, to -6.7% in November. These suburbs were showing the greatest resistance to falling values, but are now in a position similar to the rest of the city,” he said.
“There is a common sentiment that any recovery in the property market will be tempered by job insecurity and the availability of funding over the coming year. It will also take time for the market to recover from recent turmoil. The downward momentum of the property market will have a bearing on the timing of any future recovery” said Dow.
Dunedin
Dunedin’s residential property values decreased by 7.6% over the past year, a slight improvement on the 8.2% decline reported in October. The average sale price in Dunedin increased slightly to $258,671.
The Southern City area continues the trend of the previous two months, showing the greatest level of decline (-12.5%). This is in sharp contrast to the Peninsula/Coastal area, which is showing a decline of only -1.9%. Meanwhile, the Taieri and Central/Northern City decreased by 6.1% and 5.0% respectively year on year.
David Paterson of QV Valuations said; “It is encouraging to see the rate of decline slowing over the last two months. However, it is much too early to celebrate an improvement in the market at this point. There are a number of issues facing the economy that could have a significant impact on the property market. These include changing bank policies in relation to the level of deposit required, and increased unemployment. On the positive side, the recent reduction in the official cash rate and easing fuel prices should assist with disposable income as time goes on”.
“QV’s November statistics show that approximately 74% of residential sales are below the 2007 rating values (compared with 80% in October). On average, properties are selling at approximately 9% below the rating values” said Paterson.
The current market puts buyers in a strong position (if they have the required deposit), as it is a very good time to be investing in property. While many buyers are taking a wait-and-see attitude in the hope that the market will fall further, the reality is that there are well priced properties available on the market now,” he said.
| « Median house price edges higher in November: REINZ | Average house price falls for a second month » |
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