Real estate prices in New Zealand gradually falling but Christchurch expecting major impact after ea
Residential property prices in New Zealand are gradually declining and the real estate market sentiment is cautious looking ahead to normally more buoyant summer months.
The latest index from QV valuations shows that prices have fallen 1.1% since March after rising 4.3% in the previous seven months.
As a result prices are now 3.1% above a year ago but still 5% lower than the market peak in late 2007. However, the average sales price increased slightly from $407,191 to $409,700 but this is because relatively few lower value properties are selling.
QV valuation manager Glenda Whitehead said little buyer demand and a considerable backlog of unsold property on the market are causing values to gradually drop.
‘Although the number of new properties being added to this pool appears to have slowed as potential vendors choose to wait until the market begins to show signs of recover. Those with properties currently on the market now accept that they will take longer to sell, although they are not dramatically dropping their asking prices,’ she explained.
Whitehead added that despite a drop in sales volume, it’s still slightly above the same time in 2008, during the worst of the recession. ‘There are early signs of a slight increase in activity as more people are assessing the market and considering their options. The housing market is usually more active in spring although the current economic climate suggests any upsurge this year will be modest. Short of any fundamental change in the market, values are expected to continue to slide slightly,’ she said.
She also pointed out that the earthquake in Christchurch is obviously going to have a major impact on the housing market in that area.
Builders hoping to cash in on the rebuilding of Canterbury after the earthquake will be subject to work conditions to ensure they cannot charge exorbitant prices and rip people off, Prime Minister John Key said.
‘Building companies that undertake work in the rapid rebuild phase that we want will have to sign conditions to ensure their work is done at a fair and reasonable rate, and I would expect all builders operating in Christchurch helping people to recover from the earthquake do so in a reasonable and fair way,’ he explained.
‘We expect them to make money and a profit, but we certainly don’t expect them to rip the people off,’ he added.
The Government is also looking at introducing new laws next week to allow people to start to rebuild and repair their homes without waiting for insurance payments.
A break down of the QV figures show that in the Auckland area values have been flat over recent months, but are 5.9%above last year, while a month ago they were 6.9% above last year. Values in the Wellington area have dropped and are now only 2% above last year, down from the 3.2% reported last month.
While in Christchurch, values are 3.2% above last year, and in Dunedin they are 2.7% up.
In Hamilton and Tauranga values are down 1.5% and 0.9% respectively.