Media release
11th July 2011
Nationwide property values
edge upwards
The QV residential property index shows that
nationwide values increased in June, driven largely by the
Auckland market.
“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 percent, and values are
now 5.2 percent below the market peak of late 2007” said
QV.co.nz Research Director, Jonno Ingerson.
“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 two percent in greater Auckland since
January” said Ingerson.
“Across the wider Auckland
area values are now 1.4 percent above last year and only one
percent below the previous market peak of late 2007. There
is variability across the Supercity 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
sitting 0.7 percent above the previous market peak of late
2007” said Ingerson.
“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” said
Ingerson.
“Values in Hamilton and Tauranga have
levelled off in recent months, with Hamilton now 3.6 percent
down on last year and Tauranga 1.8 percent down” said
Ingerson.
Ingerson said “the Wellington area is the only
main centre where values have continuing to decline in
recent months. Values have dropped over a percent since
January, and now sit 3.3 percent below the same time last
year. Uncertainty around restructuring in the Public Sector
may be causing some home owners to take a more conservative
approach to the property market”.
“The low sales
volumes and patchy activity across large parts of
Christchurch for several months now means that our standard
index may not be comparable to the index pre earthquake. As
a result we are not publishing an index for Christchurch
until we have more certainty around the validity of the
results” said Ingerson.
“The recent CERA announcements
of red and green zones helps give some certainty to some
people in Christchurch, enabling them to evaluate their
options and make property decisions. This will likely to
lead to a further increase in demand for vacant sections and
houses in the undamaged parts of Christchurch and
surrounding areas” said Ingerson.
“Properties in
undamaged parts of Christchurch tend to be selling for
around their pre- earthquake values, with little sign that
prices are either significantly up or down” said
Ingerson.
“In Dunedin values have been a little variable
since the New Year, but have been generally flat. Due to the
monthly variability both this year and last year the annual
change in values is also varying from month to month, but
values are currently 3.5 percent below last year” said
Ingerson.
While unrelated to the QV index, and a less
reliable measure of value change, the average New Zealand
sales price over the last three months is $412,746 up from
the $404,057 reported last month.
Values in many
provincial centres have increased over the last month,
leading to a closing of the gap between this year and last
year. Whangarei (-4.1), Gisborne (-3.1), New Plymouth
(-3.3), Wanganui (-4.0), Palmerston North (-2.8) and
Invercargill remain the furthest below last year. In Napier
(-2.1) and Hastings (-1.4) values are still a little below
last year, while in Rotorua (-0.2), Nelson (-0.2) and
Queenstown Lakes (0.1) values remain
similar.
QV’s Residential Price Index for June
shows that property values in the Auckland region are 1.4%
higher than the same time last year. Values have continued
to increase, a trend we have seen over the past couple of
months.
Ms Glenda Whitehead of QV Valuation said “the
news in Auckland is positive. There were improvements in
values for most parts of the region, but the recovery has
been slow and not evenly spread.”
Ms Whitehead said
“old Auckland City values had the biggest monthly
movement, moving past the October 2007 market peak. It is
now sitting just under a percentage point above that level.
The gains in the Auckland City area are perhaps due to the
lack of listings, old character locations, the demand for a
good school zone, and the perception it is a safe place to
invest”.
Ms 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.”
“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. This excludes monolithic homes which buyers are
sceptical of due to weather-tightness issues” Ms Whitehead
said.
“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” Ms Whitehead 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” Ms Whitehead
said.
Ms Whitehead said “within Waitakere, there has
been an increase in demand over the past couple of weeks,
and now quite a few sold signs are up. 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. 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.”
Ms Whitehead said “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.”
QV’s Residential Price Index
is calculated using sales data from the three months leading
up to the month being reported. It is not the same as the
average sales price, which fluctuates in line with the mix
of properties selling in upper or lower price brackets. The
average sales price for the Auckland region in June was
$540,580.
Hamilton
QV’s Residential Price Index
for June shows that property values in Hamilton are 3.6%
lower than the same time last year. In the past few months
values appear have continued to steady.
Mr. Richard Allen
of QV Valuations said: “Values in Hamilton City have moved
in a very narrow band over the last six months. Strong
evidence the residential market in the city has completely
levelled off.”
“The property growth for each of the
regions within Hamilton City is variable. South West
Central, City/North West and North Hamilton decreased.
Whereas South East Hamilton increased” Mr. Allen
said.
Mr. Allen said “although city values have remained
stable there is some anecdotal evidence to suggest that
things may be picking up a little.”
QV’s Residential
Price Index is calculated using sales data from the 3 months
leading up to the month being reported. It is not the same
as the average sales price, which fluctuates in line with
the mix of properties selling in upper or lower price
brackets. The average sales price for Hamilton in June was
$339,065.
Tauranga
QV’s Residential Price Index for
June shows that property values in Tauranga are 1.8% lower
than the same time last year. The steady trend for values
seen in the past few months has continued.
Mr. Shayne
Donovan-Grammer of QV Valuations said; “the Tauranga
property market continues to be subdued with a general lack
of interest. This, to some degree, is to be expected for
this time of year, winter has never been the peak selling
season.”
“Section sales are slow and a few of the
sales in this category have come through at lower than
expected levels. Buyers are getting some good deals, mostly
in situations where sellers who need to sell have to
compromise more on the price than they initially expected”
Mr. Donovan-Grammer said.
Mr. Donovan-Grammer said
“overall the market is following a predictable pattern
given what has played out over the last two
years.”
QV’s Residential Price Index is calculated
using sales data from the 3 months leading up to the month
being reported. It is not the same as the average sales
price, which fluctuates in line with the mix of properties
selling in upper or lower price brackets. The average sales
price for Tauranga in June was
$415,418.
Wellington
QV’s Residential Price Index
for June shows that property values in the Wellington region
are 3.3% lower than the same time last year. Values
continue to trend downwards.
Mr Kerry Buckeridge of QV
Valuations said “the Wellington market has continued to be
quite subdued overall.”
“Over the last couple of
months we have seen low activity levels and values continue
to trend downwards. There is a seasonal influence, in
winter we typically do see less properties listed and less
sales activity” Mr Buckeridge said.
Mr Buckeridge said
“the only area of the market that there appears to be some
activity is properties in lower priced locations. This is
only if they are sensibly priced. Agents are reporting that
sellers are being realistic in their price expectations.
Few are anticipating receiving premium prices in the current
market.”
“At this stage we are not seeing evidence for
a substantive continuing decline in values; however, as yet
there are no signs of a recovery. With current prices, and
historically low interest rates, housing is the most
affordable it has been for many years, yet people are not
rushing into the market” Mr Buckeridge said.
Mr
Buckeridge said “it is possible that uncertainty in the
public sector has resulted in a more conservative approach
from home owners. Many appear not to be trading up.
Meanwhile, some first home buyers are entering the market in
locations with more affordable options such as Upper Hutt
and Porirua.”
QV’s Residential Price Index is
calculated using sales data from the 3 months leading up to
the month being reported. It is not the same as the average
sales price, which fluctuates in line with the mix of
properties selling in upper or lower price brackets. The
average sales price for Wellington in June was
$449,871.
Christchurch
The significant slowdown
in the number of sales, and the delays in the overall sales
process in Christchurch following the February 22nd
earthquake mean that the QV residential price index cannot
yet be used to measure the change in property values.
Mrs.
Melanie Swallow of QV Valuations said “the Christchurch
market has remained fairly static over the past month.”
“We continue to see the trends of the previous month,
with interest in the main Selwyn and Waimakariri townships
and Christchurch’s North and Western suburbs. There also
remains some interest for relatively undamaged property in
more affected areas. Agents report a very small lift in
enquiries for undamaged property in the eastern suburbs,
which is encouraging” Mrs. Swallow said.
Mrs. Swallow
said “the recent CERA announcements identifying red and
green zone areas provides some certainty for people. It
means they can now evaluate their options and start to make
property decisions. As a result, we do expect to see some
interim pressure on the undamaged affordable properties and
vacant sections. We anticipate this will be a gradual
process that will gain momentum over time.”
“Overall the big picture and full effect of the
earthquake will take time to filter through into
quantifiable data. We expect the market to continue in a
similar vein to the previous month with a slight increase in
activity in the entry level to mid part of the market”
Mrs. Swallow said.
Dunedin
QV’s Residential Price
Index for June shows that property values in Dunedin are
3.5% lower than the same time last year. Values continue to
fluctuate in a narrow band.
Mr. Tim Gibson of QV
Valuations said: “there has been minimal change in values
in 2011 after values declined during late 2010. Value levels
are now 7% below the market peak in July 2007.”
“A
recent example demonstrating this market movement is a
property in the Wakari suburb. A tidy weatherboard bungalow
was bought in 2008 for $240,000 and it sold for $227,000 in
June, reflecting a 5.4% decrease in value. Higher valued
quality properties have performed slightly better with a
smaller degree of change” Mr. Gibson said.
Mr. Gibson
said “active parties within the residential market
continue to remain cautious in their decision making. This
has resulted in longer listing time frames and more
conditions on offers made during negotiations.”
“Demand exists for dwellings in sought after localities
that are well presented. We have seen this result in shorter
selling timeframes and a desired sale price achieved.
Properties that lack even one attribute that potential
buyers are after have seen a longer selling period and
greater discounts applied to achieve an agreed sale price”
Mr. Gibson said.
QV’s Residential Price Index is
calculated using sales data from the 3 months leading up to
the month being reported. It is not the same as the average
sales price, which fluctuates in line with the mix of
properties selling in upper or lower price brackets. The
average sales price for Dunedin in June was
$276,084.
Due to the February
earthquake in Christchurch and the disruption to the
property market in that area, we will not be publishing an
index for Christchurch for several months.
If a City or
Region is shown in italics with an * this indicates the
values for this area may not be statistically accurate as
they are based on a low volume of sales.
N/A – indicates
that either there were too few sales to report a Property
Value Growth % or that the data for this period was
unavailable
The information included in the above table is
calculated based on the sales data entered into QV’s system
in the previous 3 month period. For example, information for
the period ending June will be calculated based on sales
entered between April 1 and June 30.
Property Value Growth
is the annual % change in residential property values,
calculated using QV’s House Price Index methodology. The
residential sales entered into QV’s system in the previous 3
month period are compared to the same period of the previous
year to identify the annual percentage change in residential
property values. Average sale prices are calculated based on
residential sales entered into QV’s system in the previous 3
month period.