There is not a lot of good news in QV's last housing market report, however Auckland appears to be the best of the main urban areas. To find out what's happening in the main areas around the country, use the links below.
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Property values in the Auckland region declined by 9.4% over the past year (calculated over the three months ending February 2009 in comparison to the same period last year), deteriorating further from the 9.0% decline reported in January. The average sale price for the region increased slightly from $496,618 to $502,193.
The Auckland Region’s property market is seeing different trends in different strata and localities of the market. The good news is that not all trends are bad.
Glenda Whitehead of QV Valuations said; “Within Auckland City our valuers have noticed renewed buyer interest in areas such as Ponsonby, Grey Lynn and Mt Albert, with reports of quality homes in these areas receiving multiple offers or competitive bidding at auctions. Prices achieved are at a better level than those seen last year. In these cases we know the buyers had been seeking out homes in those particular locations for some time. Anecdotal evidence indicates that there are many people interested in making property decisions, but prior to action they are thoroughly researching their market and ensuring they have their financial affairs in order. The ability to meet bank equity requirements is a big talking point and a significant barrier in the sales process. The market is still adjusting to expectations of the banking industry” Glenda said.
“While sale numbers are down, those sales are ensuring that the market redefines the value being placed on both location and housing quality. In short, stronger prices for quality, and discounts for poor presentation or negative location attributes. However, we are still seeing mortgagee sales filter through and they continue to affect all value levels and locations. Prices achieved on these sales reflect buyers’ advantageous positions. In some areas of homogenous housing stock where these sales are more prominent, there is a negative impact on all values” Glenda said.
“In Waitakere activity appears to have increased over the past couple of weeks, especially in the under $450,000 bracket. Agents are saying that realistic vendors are getting results, as opposed to ‘dreamers’. Prices are still at the lower value levels that were established last year, but there is more optimism in the air that the backward movement may soon slow. There are reports of a few serious buyers around, but the gap between vendor and buyer expectations still needs to be closed. Auctions are also starting to be a little more prominent” Glenda said.
“The wider Manukau market continues along the same lines as reported last month, with good buying opportunities in traditional investor areas such as Otara, Mangere, Papatoetoe and Manurewa. Mortgagee sales continue to impact on this market, but value levels are beginning to stabilise. Homes in the eastern suburbs of Pakuranga, Howick, and Dannemora continue to take longer to sell (in excess of 6 weeks), partly due to an abundant number of listings. There appears to be fewer homes on the market in and around Bucklands Beach which is possibly due to owners being in a better position to delay selling until the market picks up” Glenda said.
Property values in Hamilton declined by 10.1% over the past year (calculated over the three months ending February 2009 in comparison to the same period last year), similar to the 10% decline reported in January. The average sale price for the city decreased from $342,347 to $334,068.
Mr. Richard Allen of QV Valuations said; “The slight decline in the City was driven by South West Hamilton which decreased by 0.7% to 11.1% year on year. Other areas of the city were in slightly better shape”.
“As interest rates are likely to continue to fall, there is some anecdotal evidence to suggest that investors are starting to re-enter the market as residential yields improve. However, sale volumes remain low. This lack of demand, the economic recession and questions over job security means that the residential property market in Hamilton is likely to remain relatively subdued for the rest of 2009. The average sale price for the city has slowly retreated over the last six months and reinforces this pessimism” Mr. Allen said.
Property values in Tauranga declined by 8.4% over the past year (calculated over the three months ending February 2009 in comparison to the same period last year), a slight improvement on the 9.0% decline reported in January. The average sale price decreased from $437,612 to $421,151.
Mr Shayne Donovan-Grammer of QV Valuations said; “Although decreasing interest rates seem to be raising the level of general activity in the market place, this is yet to convert into sales. Vendors are still grimly holding on to what they think their property is worth, while buyers are insistent on buying at heavily discounted prices.”
“Entry level property, the target of investors and first home buyers, appears to be where most of the activity is occurring. More expensive property doesn’t have the same appeal, as not many buyers are looking to take on big mortgages under the present climate” Mr. Donovan-Grammer said.
“In the coastal areas of Mount Maunganui and Papamoa which went quiet six months earlier than Tauranga, we are now starting to see some low sales prices” Mr. Donovan-Grammer said.
Property values in the Wellington region decreased by 9.3% over the past year (calculated over the three months ending February 2009 in comparison to the same period last year), deteriorating further from the 8.5% decline reported in January. The average sale price for the region increased slightly from $431,088 to $433,339.
Mr Kerry Buckeridge of QV Valuations said; “The further decline in property values on last month has well and truly set the market direction for the foreseeable future in Wellington. This seems to be fuelled by vendors who are finally succumbing to the market’s new lows, as holding onto a listed property potentially risks an even lower offer. Although there seems to be a few more “sold” signs around, many are the clearance of older listings. Unless they have to, prospective vendors are not bothering to enter the market at this stage”.
“The most successful realtors in Wellington’s current market are those who are working very hard at keeping their vendors well informed, so that they may be better prepared for the lower offers coming through, relative to initial expectations. There are certainly a number of buyers around who are unashamedly seeking value and just assume the vendor needs to sell” Mr Buckeridge said.
“Despite some signs of increased interest, this is not yet translating into significant sales volume. Sales in Wellington typically involve parties who are especially cautious. Guarded bankers and wary buyers are stretching out proceedings, with most contracts inheriting an extensive list of conditions. The property market will need a considerable lift in sales-volume before any price recovery can commence. We don’t expect to see such a lift any time soon, given domestic job-security issues and the international economic situation” Mr Buckeridge said.
Property values in Christchurch decreased by 9.1% over the last year (calculated over the three months ending February 2009 in comparison to the same period last year), decreasing slightly further from the 8.8% annual decline reported in January. The average sale price for the city decreased slightly from $347,157 to $344,816.
Melanie Holcroft of QV Valuations said; “Property values since November 2008 continue to decline. The average sale price also continues to show a decline, although this could be influenced by a low sales volume over the months of January and February. Local banks have reported an increase in pre-approvals, which is consistent with agents reporting an increase in inquiries. This activity is yet to trickle through into the sales however. Anecdotal evidence suggests that purchasers are taking their time before making a decision to purchase. They appear to be weighing the current attractive mortgage interest rates against job security. The overall market sentiment appears to be cautionary”.
“Of the city suburbs, the Eastern Suburbs show the largest year-on-year decline, from 8.6% in January to 9.1% in February, and the Central Suburbs decreased from 8.5% to 9%. We expect the softening market conditions to continue for the next quarter ahead” Ms Holcroft said.
Dunedin’s residential property values decreased by 9.4% over the past year (calculated over the three months ending February 2009 in comparison to the same period last year), deteriorating further from the 8.3% decline reported in January. The average sale price in Dunedin increased slightly from $254,088 to $258,212.
Mr. David Paterson of QV Valuations said; “The Southern City and the Taieri areas have shown the greatest year-on-year decline (-11.2% and -11.5% respectively). This is in contrast to the Peninsula/Coastal and Central Northern areas, which have declined by 6.7% and 7.6% respectively year on year. So all property values across the city are still declining, but some areas are declining faster than others”.
“Agents are reporting more activity in the market; however this has not yet shown up in increased sales or values. It is likely we will see a continuation of the current trends for some time yet. Affordability has improved significantly in recent months and the current market does provide good opportunities for first home buyers, if they have the necessary deposit. The 20% deposit required to buy the average house in Dunedin is around $50,000, which is certainly enough to stifle any significant demand from this market segment. Investors are also able to get back into the market by taking advantage of better yields” Mr. Paterson said.