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QV’s July statistics for the residential property market report a 12.7% growth in national property values over the past year (calculated over the three months ending July 2007 in comparison to the same period last year).

 

Over this period, the average sale price for New Zealand properties was $381,298.

 

“QV is reporting a continued increase in property values across the country, however, the trends differ within cities and between regions. Prices in the main urban areas appear to be stabilising while some provincial cities continue to experience strong growth.” said QV spokesperson Blue Hancock.

 

“There are clear signs that the property market is slowing with feedback of fewer listings and buyers, resulting in fewer sales. However, as the number of buyers is dropping along with the number of listings, this isn’t putting significant downward pressure on prices.” said Mr Hancock.

 

“We are reporting falls in some average sales prices, however changes in average or median sales prices are not always an accurate measure of changes in property value.  They can simply reflect more activity in the lower end of the market, where affordability is becoming a key issue. This is evident within the wider Auckland region, where we are showing the average sale price to have dropped to $490,818 even though we are reporting property values to have increased to 11.9% over the past year” said Mr Hancock. “QV uses an index methodology that compares the base value of every property to its sale price to determine changes in property value.  This overcomes the limitations of simple changes in averages or medians.”

 

The main urban areas are showing signs of flattening prices with minimal difference in QV’s figures from last month. Auckland City’s property values were up by 10.2%, similar to 9.9% reported last month. Hamilton and Wellington were fairly static at 13.6% and 14.7% respectively. Christchurch remained flat at 13.4% while Dunedin eased slightly from 11.4% to 10.8%. “Analysis of the latest activity suggests that the urban markets may be plateauing. If the spring market doesn’t provide a surge, then we would expect to see annual growth in property values dropping back to single figures in coming months” said Mr Hancock.

 

A number of areas in the country are still achieving significant increases in property values. Gisborne continued to perform well with annual growth of 25%. Invercargill maintained its strong market with values increasing by an impressive 30.9%.  Some areas are beginning to show evidence of the easing market with Queenstown at 11.5%, down from 12.5% last month and New Plymouth easing to 10.3% and Rotorua to 8.9%.

Main Urban Areas Commentary:

 

Auckland:

 

Property values in the Auckland region increased by 11.9% over the past year (calculated over the three months ending July 2007 in comparison to the same period last year), up from 11.2% reported last month.

 

“While the region continues to report strong growth in property values, there is a feeling that the market is beginning to slow” said Glenda Whitehead of QV Valuations. “The latest QV statistics also report a drop in the average sale price in the region from $492,857 last month to $490,818”.

 

“Our valuers are reporting patchy market activity across the region.  Activity levels, on the whole, appear lighter than experienced for a number of years. However, agents in some areas continue to report good levels of listings and sale prices that are keeping the vendors happy.  People are acting very cautiously with the time from listing to sale appearing to be stretching out”.

 

Hamilton:

 

Residential property values in Hamilton grew by 13.6% over the past year (calculated over the three months ending July 2007 in comparison to the same period last year). The average sale price for the city was $356,849.

 

“Hamilton has been experiencing steady growth in property values over the past couple of months” said Richard Allen of QV Valuations. “However, there are signs that the market in Hamilton is beginning to ease with South East Hamilton 12.5% being the only area in the city that records higher growth than last month. South West Hamilton remained at 13.2% while Central/North West Hamilton and North East Hamilton eased to 12% and 13.6% respectively.”

 

“Despite signs of a softening market, Hamilton still records an increase in the average sale price from $354,461 last month to $356,849 this month” said Mr Allen. “Expectations are that sales activity will decline as a result of increasing interest rates. However, the general feeling is that sale prices are likely to remain fairly static rather than decrease”.

 

Tauranga:

 

Tauranga property values grew by 6.5% (calculated over the three months ending July 2007 in comparison to the same period last year). The growth rate is similar to that reported last month (6.6%).

 

“The Tauranga property market seems to be on a plateau with growth rates at similar levels over the past few months” said Christopher Boyd of QV Valuations. “The average sale price increased from $419,556 last month to $425,865 this month”.

 

“Recent anecdotal evidence suggests that sales volumes and inquiry have dropped off significantly and the market is beginning to slow. The school holidays also historically have tended to show lower levels of activity. Real estate agents report a reasonable level of stock but reduced sales volumes with potential purchasers less inclined to make the final decision. There is an increasing number of conditional contracts to purchase property, which reflects more buyer caution and longer sale time-frames” said Mr Boyd.

 

Wellington:

 

Property values in the Wellington region grew by 16.3% over the past year (calculated over the three months ending July 2007 in comparison to the same period last year). The average sale price for the region was $438,406.

 

“The expected effect of higher interest rates is yet to be reflected in the Wellington market.  The annual increase for the Wellington region is 16.3%, the highest for the past two years.  The leading area is Upper Hutt where the growth records a high of 20.4%.  The lowest increase is for Wellington City 14.7%, but still at a similar level reported last month” said Max Meyers of QV Valuations.

 

“The typical winter slowdown in activity is here. We are expecting the current high interest rates to dampen any increase in activity and price as we approach the end of the year, particularly as there will be a significant number of mortgage renewals in this period” said Mr Meyers “This slowdown is expected to be reflected more in sale volume than price”.

 

“Feedback from our valuers suggests that the slowdown in activity is most evident furthest away from the city centers in the areas such as Wainuiomata" said Mr Meyers.

 

Christchurch:

 

Christchurch’s residential property values increased by 13.4% over the past year (calculated over the three months ending July 2007 in comparison to the same period last year). Over this period, the average sale price for the city was $356,969.

 

“The year on year growth for Christchurch property values remains stable at 13.4%, the same as reported last month.  The provincial areas of Canterbury generally fared a little better with most centres recording higher growth rates than last month” said Mark Dow of QV Valuations.

 

“The volume of sales is down for this period. This indicates caution in the market, but also reflects the seasonal slowdown over winter.  Overall, prices appear to be holding up at present. However, rising interest rates, general affordability and market confidence are having an impact on purchasing decisions” said Mr Dow. “The lower to middle housing price bracket is driving most of the activity in the local market.”

 

Dunedin:

 

Dunedin’s residential property values increased by 10.8% over the past year (calculated over the three months ending July 2007 in comparison to the same period last year), down from 11.4 % last month. Over this period, the average sale price in Dunedin was $274,551

 

“We are now seeing signs of a slowing market in Dunedin with easing growth rates. However, it is too soon to say whether it is a result of the recent interest rate rises or the seasonal winter influence with a very cold and wet July” said David Paterson of QV Valuations.

 

“Across the city, growth has been consistent, ranging from 9% to 11%. There has been a lift in the average sale price, mainly due to a number of sales over $1 million recorded over this period.” said Mr Paterson. “Agents are still reporting good attendances at open homes, however there is a noticeable shortage of listings on the market”.

 

About the Article:

 

This article is from QV Valuations as it appeared on Propertytalk.com