New Zealand property prices stabilising, latest data suggests
Residential property prices in New Zealand are beginning to stabilise but are still 5.6% below the market peak in 2007, according to the latest figures to be published.
The data from QV Valuations, New Zealand’s largest valuation and property information company, shows that the rate of falling prices has slowed so that the gap between values this year and last has closed to 0.3%.
‘This time last year values were steadily increasing from a low in early 2009. This increase continued until March 2010, then values began to gradually decline,’ it says in its November monthly report.
There are signs that nationwide values are beginning to stabilise, with the strongest signs of this in the Auckland region where values have now been stable for several months. Compared to the same time last year, values are now 1.8% higher, but most of this increase occurred between November 2009 and March this year, the report indicates.
‘Values in the Auckland region have levelled, reflecting the stability in our statistics over the past few months,’ said Glenda Whitehead of QV Valuations. But she added that at present this stability in values isn’t lifting activity, which remains uncharacteristically muted for this time of year.
‘The recently reported boost in listings should however provide purchasers with a wider potential pool from which to purchase, which could lead to more turnover,’ she added.
Values in Hamilton and Tauranga have also stabilised in the last couple of months after declining for most of the year. Hamilton is now 1.6% below the same time last year, and Tauranga 0.9% down.
Compared to the other main centres, values in the Wellington area have dropped the most since March this year. Values are now 1.6% below the same time last year although in the last month there are the first signs that values in Wellington are also stabilising.
The report also indicates that the property market in Canterbury is now beginning to recover after following the September earthquake, QV said. But the sales process is still taking longer than usual as buyers, banks, and insurance companies complete thorough checks on the properties before completing the sale.
This meant that the QV residential price index cannot yet be used to measure the change in property values after the earthquake. But preliminary results show that property values have bounced back after the earthquake with October 3.2% higher than the pre-earthquake trend.
Values in Dunedin have continued to be variable in recent months, but in general have been in gradual decline all year and are now 1.2% below the same time last year. Values remain above the same time last year in Wanganui, 1.3 percent%, and Nelson at 1.9%. Values are similar to last year in Rotorua, 0.9%, Hastings at 0.6%, Napier at 0.9%, and Queenstown Lakes at 0.9%. While in New Plymouth they are down 0.6%, in Whangarei down 2.1%, Gisborne down 5.1% and Palmerston North down 1.3%.
QV research director Jonno Ingerson said the ability to secure bank funding remained a concern for buyers who were also taking their time over purchase decisions. But good quality properties in established suburbs across main centres are continuing to sell quickly and for good prices.
‘There has been an increase in the number of properties put on the market over the last few months, as is typical of this time of year. However with the low level of sales activity, this is increasing the stock of unsold property. We now expect that many buyers will delay any purchase decisions until the New Year,’ said Ingerson.