QV property stats out - is the slump over?

Photo / Greg Bowker

New Zealand property values are beginning to stabilise, but are still 5.6 per cent below the market peak in 2007.

The latest QV residential property indices for November show the rate of decline has slowed in recent months and it apeared values were beginning to stabilise.

"This time last year values were steadily increasing from a low in early 2009. This increase continued until March 2010, then values began to gradually decline. As a result the gap between values this year and last year has closed further to 0.3 per cent," QV said.

QV.co.nz research director Jonno Ingerson said the ability to secure bank funding remained a concern for buyers, who were also taking their time over purchase decisions.

Good quality properties in established suburbs across main centres continued to sell quickly and for good prices, he said.

"There has been an increase in the number of properties put on the market over the last few months, as is typical of this time of year.

"However with the low level of sales activity, this is increasing the stock of unsold property. We now expect that many buyers will delay any purchase decisions until the New Year," said Ingerson.

There were signs that nationwide values are beginning to stabilise, with the strongest signs of this in the Auckland region where values have been stable for several months, QV said.

"Compared to the same time last year, values are now 1.8 percent higher, but most of this increase occurred between November 2009 and March this year. "

After falling slightly for a couple of months, values have been more or less stable since June, QV said.

Values in Hamilton and Tauranga have also stabilised in the last couple of months after declining for most of the year.

Hamilton is now 1.6 percent below the same time last year, and Tauranga 0.9 percent below.

Compared to the other main centres, values in the Wellington area have dropped the most since March this year.

Values are now 1.6 percent below the same time last year although in the last month there are the first signs that values in Wellington are also stabilising.

The property market in Canterbury is now beginning to recover after following the September 4 earthquake, QV said.

According to the Earthquake Commission less than 5 per cent of properties in Canterbury suffered major land damage.

"Since the earthquake there have been very few sales of houses in badly damaged areas, but properties with little or no damage are now beginning to attract good interest."

However the sales process was still taking longer than usual as buyers, banks, and insurance companies complete thorough checks on the properties before completing the sale, QV said.

This meant that the QV residential price index cannot yet be used to measure the change in property values after the earthquake.

Preliminary results show that property values have bounced back after the earthquake with October 3.2 per cent higher than the pre-earthquake trend.

Values in Dunedin have continued to be variable in recent months, but in general have been in gradual decline all year and are now 1.2 per cent below the same time last year.

- NZ HERALD ONLINE