Property values ease for second month

Monday 12th July 2010

New Zealand property values eased for the second month in a row as people remained cautious about the property market as the country’s economic recovery falters, according to QV Valuations.

Last month, property values were 5.2% higher than the same month in 2009, retreating from the year-on-year gain of 5.6% in May. That’s the second time since March 2009 that the increase has lagged behind the previous month. Values are now 4.3% below their peak in late 2007.

“Buyers continue to be very cautious and selective in their purchasing decisions,” said spokeswoman Glenda Whitehead in a statement.

“There are still sellers who have unrealistic price expectations in the face of present slow market conditions.”

The data comes after Auckland’s biggest real estate agent Barfoot & Thompson reported a 16% slump in sales last month, as winter deterred people from looking for new property. House prices are forecast to fall at an annual rate of 2% for the next two years, according to Westpac research, after the government clamped down tax treatment for property investment.

Whitehead said the tax changes didn’t seem to be changing behaviour too much, with activity largely unchanged from the lead-up to the government budget, and if people were to alter their behaviour, it would be over the next 12 months.

The national average sales price rose to $404,715 from $403,070, due to a change in the make-up of sales taking place, which QV said shows the unreliability of using sales prices to measure value.

In Auckland, property values rose 7.9% in a rolling three-month average from the same month of 2009, down from an 8.8% increase in May. The average sale price rose to $537,412 from $534,639 in May. Values in Hamilton were 2.2% up on last year, up from a 1.7% gain in May. The average price fell to $347,722 from $350,722.

Tauranga’s increase sped up to 0.7% from 0.4% while the price rose to $413,957 from $409,376. Wellington’s values rose 5.4%, down from 6% and the average sale price edged up to $455,134 from $454,625.

In Christchurch, values rose 5.9% in the three months through June, from the same period last year. That’s down from the 6.2% pace a month earlier. The average sale price rose to $364,131 from $359,597.

In Dunedin, the annual increase was 5.8%, up from a 4.8% annual pace in May. The average sale price in Dunedin gained to $278,475 from $269,848.

Businesswire.co.nz

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