The property market appears to be gathering strength, although banks are carefully vetting who they lend money to.
The latest Quotable Value figures reveal nationwide house values have increased 0.7 per cent over the past month but are five per cent below the same time last year. The average sale price increased from $378,535 in June to $382,758 in July.
QV spokeswoman Glenda Whitehead said values are increasing more in the middle range of the market. She said low interest rates and a shortage of quality houses for sale in some areas may keep the market active, but rising unemployment could work against the momentum.
The volume of sales is above the historically low levels experienced last winter, although they are still less than the long term average. The increased number of sales was driven by the affordable end of the market as more investors and first home buyers returned to the market.
Whitehead says that values are also increasing in the middle value range of the market.
"In some areas there is a shortage of quality properties for sale, resulting in increased competition amongst motivated buyers. This may be driving a short term increase in sales prices.
"The market seems to have returned to some form of normality. Buyers are making rational, carefully considered decisions based more on fact than emotion. Obtaining finance continues to be crucial to many deals moving forward, with banks continuing to screen borrowers and property details carefully."
QV says it is unlikely the marginally increased values over the past quarter marks the beginning of another boom, as rising unemployment could drive down the market again.
All the main centres are now showing property value growth over the last quarter.
Across the Auckland area values are now down 3.5 per cent on the same period last year, up from the -5.9 per cent reported last month. Hamilton has improved further to be at -2.9 per cent, Tauranga is now at -6.6 per cent, the Wellington area -4.0 per cent, Christchurch -5.5 per cent and Dunedin -1.4 per cent.
All of the provincial centres are now showing less annual decline than was reported last month. Whangarei now has values down 9.4 per cent on last year, Gisborne is at -10.5 per cent, Rotorua -8.0 per cent, New Plymouth -1.4 per cent, Wanganui -5.4 per cent, Palmerston North -4.7 per cent, Queenstown Lakes to -5.7 per cent, and Invercargill -6.6 per cent.
-NEWSTALK ZB
See the QV July stats here
