Property values weaken for first time in 14 months

Photo / Greg Bowker

New Zealand property values weakened for the first time in 14 months in May, reflecting a general lack of confidence among buyers faced with more choice, according to QV.

Property values last month were 5.6 per cent higher than in the same month of 2009, retreating from the year-on-year gain of 6.1 per cent in April.

That's the first time since March 2009 that the increase has lagged that of the previous month.Values are currently 4.1 per cent below their late-2007 peak, according to the statement from QV.co.nz research director Jonno Ingerson.

He said there was some evidence this year that property investors had held off on purchases until they saw the detail of last month's Budget and the changes to the tax treatment of investment properties.

"With the various tax changes still some time away, any effects are likely to take some time to flow into the market," Ingerson said.

"We expect that sales volumes will remain static over winter."

The national average sales price for the three months to May fell to $403,070 from $405,235 in April. Ingerson said the changes to tax on properties is unlikely to cause an across the board weakening in prices, though lack of buyer confidence will weigh on the market short term.

In Auckland, property values rose 8.8 per cent from the same month of 2009, down from a 9.5 per cent increase in April. The average sale price rose to $534,639 from $532,538 in April.

Values in Hamilton were 1.7 per cent up on last year, down from a 2.7 per cent gain in April. The average price fell to $350,722 from $357,200.

Tauranga's increase abated to 0.4 per cent from 0.6 per cent while the price slipped to $409,376 from $412,080. Wellington's values rose 6 per cent, down from 7.1 per cent and the average sale price fell to $454,625 from $460,365.

In Christchurch, values rose 6.2 per cent in the three months through May, from the same period last year.

That's down from the 6.9 per cent pace a month earlier. The average sale price fell to $359,597 from $367,688.

In Dunedin, the annual increase was 4.8 per cent, down from a 7.5 per cent annual pace in April. The average sale price in Dunedin fell to $269,848 from $275,142.