Property values keep falling: QV

Photo / Herald on Sunday

Property values continued to fall during December, but the rate of decline has slowed, indicating that values are beginning to stabilise.

Latest figures from Quotable Value show property values are now 0.9 per cent below the same time last year and 5.8 per cent below the market peak of late 2007.

While values rose during the first four months of year, they declined again from April, and by December had fallen 1.9 per cent compared to nine months earlier.

However, the rate of decline began to slow towards the end of 2010, suggesting that values may be beginning to stabilise in some areas, QV.co.nz research director Jonno Ingerson said.

Values in the Auckland region increased by more 1.5 per cent between January and March before dipping again until July, and ending the year 0.6 per cent above the same period in 2009.

Values of residential properties in rural areas stayed flat across the first part of the year, before dropping away across the remainder of 2010, Ingerson said.

Across all provincial areas values rose through until March before falling until June, stabilising for a few months, then dropping steadily in the last three months of the year.

In the main centres values rose through until April before falling across the remainder of the year.

Low sales volumes were another key feature of the market during the year, as consumers choose to repay debt, Ingerson said.

"The number of sales in October 2010 dropped to the lowest level for that month since 1985, and while there was a very mild recovery in November, it was still well below average. Early indications are that the number of sales will also be low in December," QV said.

Ingerson said and many would-be buyers and sellers were under financial pressure and were choosing to reduce debt rather than buy or sell property.

Many sellers were also unwilling to realise potential losses while values were falling, he said.

"Without significant changes in the wider economy, indications at this stage are that there are unlikely to be any dramatic changes in the property market during 2011," Ingerson said.

"Consumer confidence is a key driver of the property market, and that will need to improve before the market returns to some form of normality."

An oversupply of property was likely to continue in the first half of the year, he said.

- NZ HERALD ONLINE