QV: Rate of increase slowing

Quotable Value statistics show the rate of increase in property values slowed again in May, to 8.2% over the past year.

Friday, June 6th 2014, 12:00PM

by The Landlord

That’s down from 8.4% in the year to April and the 10% annual rate of increase reported in December.

Values had risen 0.7% nationwide over the past three months, the valuer said.

Auckland’s rate of increase has also slowed, from 13.9% year-on-year in April to 13.1% year-on-year in May.

Spokeswoman Andrea Rush said: “Nationwide values are increasing for the second month in a row after showing a slight decline in March, however the picture is quite mixed. While values in all the main centres have increased to varying levels, some areas within the cities are showing decreases and values in many of the smaller regions are flat or decreasing.”

She said sales volumes were 10% to 15% lower than the same time last year, which could be a precursor to values dropping.

QV valuer Bruce Wiggins said: “In Auckland the picture is mixed. We’re seeing some strong prices achieved at auctions, of note are some recent sales in the southern Auckland suburbs of Mangere Bridge and Greenlane.”

But he said more traditionally sought-after suburbs had seen softening.

“Properties in the inner-city suburbs such as Grey Lynn and Ponsonby are often not achieving vendors’ price expectations. For example the Ponsonby property in Lincoln St that was media-hyped as looking for $2 million sold for just over $1.6 million and a Grey Lynn do-up that was poorly presented passed in, so the feeling is there are fewer buyers especially considering the prices required.”

He said North Shore was steady but auctions were achieving only a small percentage of sales compared to the number of properties passing in or getting no bids.

Hamilton City has risen 0.3% over the past three months, and 4.8% over the past year and values there are now 0.7% above the 2007 peak. Valuer Richard Allen said the cheaper end of the market was slow, because of the impact of LVR limits on first-home buyers.

“Rent levels are creeping up. This could be due to more first-home-buyers needing to continue renting because of lack of finance available to get them into the housing market.”

The Tauranga city market has increased 2.3% in the past three months and 5.1% year on year. It remains 6.4% below the peak of 2007.

Values in the Wellington region have increased 0.7% over the past three months and are up 1.8% since May last year.

Valuer Pieter Geill said: “Buyers are very cautious and particular about what they will buy. There seems to be little urgency to make a decision from buyers as most properties are not getting snapped up quickly and there has been low attendance at open homes. Well-presented and located property is still selling well. Investors are still active and when a rare bargain such as a mortgagee sale is around, these are jumped on quickly.”

Property values in Christchurch City have decreased 0.2% over the past three months but are 7.6% higher than May last year.

Valuer Daryl Taggart said: “Things in the Christchurch market are ticking along as they have for the last couple of months. The market is a bit quiet but there is still a bit of activity, just not as much as this time last year.”

Property values in Dunedin City had increased 0.5% over the past three months, 2.0% year on year, QV said.

Provincial centres reported mixed fortunes.

In the North Island, the Kaipara District increased 2.9% over the past three months and was up 5.3% since May last year.

The Far North District decreased 1.5% over the past three months and 4.8% year-on-year.

The Ruapehu District is down 11.8% over the past three months and property values are 28.5% below what they were in 2007.

Palmerston North City remains flat with a 0.2% decrease over the past three months and a 0.7% increase year-on-year.

QV said satellite areas of Christchurch were seeing a flow-on effect of the value increases in the city since the earthquakes compared to areas that are further afield.

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