House prices gain, but with a warning

Property values in the main centres have risen in the last three months. Photo / Richard Robinson

House values are climbing back towards last year's levels after four months of improvement, says QV Valuations.

But the company warns that the rise could be a temporary surge caused by demand exceeding supply.

The average house price was down 2.8 per cent in QV's August index - calculated from the previous three months' market figures - from the same period last year.

This followed a 5 per cent annual decline reported last month, which was an improvement on the 7.1 per cent of the previous month.

The national average house sale price rose to $385,426 in August from $382,758 in July.

Glenda Whitehead, QV Valuations manager, said sales activity in August was solid and the number of sales had picked up from last year's lows when plenty of properties were on the market.

Quick sales and higher prices were the result of various factors such as the advent of spring, a revival in buyer confidence, many buyers chasing properties and a shortage of listings.

But Ms Whitehead warned that the recent rise in values was likely to be a temporary surge rather than the start of another boom.

"If more properties come on to the market in spring, as expected, then the imbalance of motivated buyers and the shortage of quality properties could be corrected and values stabilise."

Property values had risen in all the main centres over the past three months.

In Auckland region, the annual decline in values had improved to 1.9 per cent from 3.5 per cent in July.

The average sale price had increased from from $500,315 to $502,022, although valueswere still 7.9 per cent below the peak they reached in late 2007.

Ms Whitehead said the spring market might be more balanced in the middle and mid upper price brackets for homes in Grey Lynn, Mt Eden, Epsom, Remuera, Pakuranga and older parts of Howick, Te Atatu North and Te Atatu South and parts of Henderson and Titirangi.