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11-07-2011

QV June 2011 Report - the regions

Landlords.co.nz

Analysis, comment and prices from QV Valuations staff across the country.

Auckland

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.

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."

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".

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" 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" 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" Whitehead said.

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."

 

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.

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.

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" Buckeridge said.

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" Buckeridge said.

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 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 Wellington in June was $449,871.

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.

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" Allen said.

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 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 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.

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" Donovan-Grammer said.

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 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 Tauranga in June was $415,418.

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.

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" Swallow said.

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" 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.

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" Gibson said.

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" Gibson said.

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 Dunedin in June was $276,084.

Source: Landlords.co.nz

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