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Auckland leads property revival in New Zealand

Nationwide property values increased in June after previously remaining relatively stable for several months. The gap in values between June this year and last year has closed to only -0.9% and values are now 5.2% below the market peak of late 2007, the index shows.

‘Much of the gain in nationwide values can be attributed to increases in the Auckland area. Apart from a minor hiccup in March values have increased by over 2% in greater Auckland since January,’ said research director, Jonno Ingerson.

It also shows that across the wider Auckland area values are now 1.4% above last year and only 1% below the previous market peak of late 2007. But there is variability with the Manukau area being more or less stable over the past three months, while North Shore and Waitakere have increased modestly. In what used to be called Auckland City increases since January mean that values are now at their highest level ever, currently some 0.7% above the previous market peak.

‘These gains in Auckland City are due to a range of factors including the lack of quality properties for sale, strong demand for established character locations and good school zones, and the perception that purchasing in central Auckland is a safe investment,’ explained Ingerson.

Glenda Whitehead of QV Valuation said, however, that although there were improvements in values for most parts of the region, the recovery has been slow and not evenly spread.

Whitehead said North Shore is likely to be the next area to reach previous peak levels followed by Manukau and then Waitakere, but that may be months away yet. ‘There has been very little market movement in these three areas for the last year to 18 months, after a prior period of recovery,’ she explained.
She added that on the Shore there are reports of a shortage in listings, especially in the $450,000 to $600,000 price range. Anything within that price range tends to fetch a ‘healthy’ price, especially those recently renovated.
‘Our valuers have noted good interest for properties that present positive returns in the traditional investor suburbs of Manukau, however investors remain cautious. Values overall remain reasonably stable, with slight increases being achieved on well presented properties. There are no indications that demand levels are increasing,’ she said.

In the south east, demand for properties appears to be exceeding supply. ‘Buyers are being selective so when good quality listings are placed on the market they are generally sold within a short time period if owner’s expectations are realistic. On the whole value levels appear stable, however some surprisingly good sales prices are being achieved for well presented properties in good locations,’ Whitehead said.

Within Waitakere there has been an increase in demand over the past couple of weeks. Agents report strong demand, but still a shortage of listings in most suburbs. Some properties in Te Atatu Peninsula have received great prices. Titirangi, New Lynn and Greenbay are also performing well, according to the report.

‘A few more developers are braving the market and undertaking small site developments now as well. Overall prices have recovered back to a similar level to a year ago. We are now well into winter, so we don’t expect great volumes of either listings or sales in the next month or three. This is the usual trend for this time of year,’ explained Whitehead.