Regional snapshot: QV

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Auckland
Hamilton
Tauranga
Wellington
Christchurch
Dunedin

Auckland
Property values in the Auckland region declined by 9% over the past year, an improvement on the 10.1% annual decline reported in March.

The average sale price for the region decreased from $495,892 to $486,986. The Auckland region is down 10.4% from its peak in December 2007.

Glenda Whitehead of QV Valuations says: "February through to April has seen much healthier levels of activity in the under $500,000 price bracket throughout the region.  The most active within this market have included first home buyers, those trading up or sideways, and investors. With this increased activity it is felt that value levels have now flattened off in this bracket, for the time-being at least. Low interest rates have been a driver for many to step back into the market, investment returns are starting to look better, and there is the perception that the market is near or at the bottom.  

"Turnover has improved considerably with many sales achieved in less than six weeks and we are aware of active bidding at auctions and multiple offers. While purchasers continue to approach transactions with caution, some positive sentiment has returned to the marketplace. In many sales we are noting that personal finance arrangements can often tip the scales one way or the other. Property purchases are again being treated as serious financial arrangements, rather than the coffee table talk of those heady days," Whitehead says.

"Within the $500,000 to $1.2 million bracket, activity has been more fickle, and we continue to feel that sale prices are still somewhat influenced by the vendor's financial circumstances. In all price brackets purchasers are returning to the fundamental principles of desirable location and quality of improvements, and are pricing their offers accordingly. High-quality property is attracting interest, while those with defects or detrimental factors continue to languish on the market," Whitehead says.

Hamilton
Property values in Hamilton declined by 8.8% over the past year, improving on the 9.3% annual decline reported in March.

The average sale price for the city decreased slightly from $338,433 to $335,091. Hamilton City is down 11.3% from its peak in October 2007.

"Although the city has experienced a slight improvement on recent times, property values in Central City/North West Hamilton area continued to decline further from -10.9% in March to -11.5% in April. Declines eased strongly in the South East from -10.1 % to -8.0 %, and also in the South West from -9.9 to -8.7%. The North East has remained steady at -7.4%," says Richard Allen of QV Valuations.

"On the whole, declining values have fluctuated in a very narrow band over the last four months or so, which may be an indication that house prices in the city have flattened out. However I am of the opinion that this may only be an aberration and that a lack of demand as we enter the winter months, and the economic recession, will put further downward pressure on residential property market in Hamilton. Winter will reveal whether the current trend will stick around," Allen says.

Tauranga
Property values in Tauranga declined by 9.9% over the past year, down further on the 8.7% annual decline reported in March.

The average sale price decreased slightly from $436,012 to $432,461. Tauranga is down 11% since its peak in October 2007.

"While activity has been strong over the last month or two there has been no indication to suggest that prices will stop falling. Now that low interest rates are assured to stay low for at least the next year or so, there is no longer urgency for buyers to make quick decisions," says Shayne Donovan-Grammer of QV Valuations

"It is clear that the majority of activity that is occurring is in the lower price brackets. There are some incredibly good buys starting to filter through. I would estimate that about one in every 15 sales now shows outstanding buying," Donovan-Grammer says.

Wellington
Property values in the Wellington region decreased by 8.5% over the past year, a slight improvement on the 8.7% annual decline reported in March.

The average sale price for the region decreased slightly from $429,848 to $424,076. The Wellington region is down 9.4% from its peak in February 2008.

Pieter Geill of QV Valuations says: "There has definitely been some strong activity in the market lately, exemplified by a very recent flurry in April. Stocks seem low probably because summer listings have eventually cleared and some potential vendors have managed to refinance and take advantage of lower interest rates. On the face of it the market is displaying healthy demand with increased attendance at open homes with the good weather through April possibly contributing to this. Although activity is not currently having a positive impact on values, it will be interesting to see if a potential drop in supply will have any effect. The lack of new stock is characteristic coming into the winter months and time will tell if demand will outstrip supply. If we see unemployment spike to predicted levels supply may increase again significantly".

"There is a continuation of forced or pressed sales which may not always be obvious to the untrained eye. Some people are definitely feeling the pinch and are finding themselves in a position where they need to sell. Listings aren't always advertised as such, but we know they exist. There is still some good buying out there," Geill says.

"Different strata in the market are behaving differently and a few investment-savvy people are taking advantage of this. Some believe it is a good time to upgrade, selling out of the more active lower-end of the market and buying in the comparatively subdued upper-end. If you can afford it there is some great buying in the $600,000+ bracket. This sentiment points to the possible movement of some upper-end properties, as long as vendors are willing to meet the market," Geill says.

Christchurch
Property values in Christchurch decreased by 9.6% over the past year, similar to the 9.7% annual decline reported in March.

The average sale price for the city decreased slightly from $349,442 to $342,929. Christchurch is down 10.1% from its peak in October 2007.

"The market appears to be flattening, but it is still too early to say whether it has bottomed-out or not. The Central and Northern suburbs have held the strongest for Christchurch City, while the Eastern suburbs have been most adversely affected. This does however make investing in rental property more attractive at present as rental levels have held against decreasing property prices and are therefore showing good yields. Many see this as a better alternative to investing in term deposits," says Melanie Swallow of QV Valuations.

"The upper-end of the market seems to be experiencing a slower rate of activity compared to the middle and lower sections. Local agents reporting a steady stream of interest in properties that are well priced," Swallow says.

"Property values since December 2008 continue to decline, although this appears to be at a slowing rate. Whilst the average sale price for Christchurch City shows only a small decrease, it must be kept in context as this data is easily skewed by normal market fluctuations and reflects the greater level of activity at the lower end of the market. Overall, sentiment is still cautionary with job security appearing to be the key driver affecting purchasing decisions. Local banks are also reporting an increase in mortgage pre approvals, particularly with the current attractive interest rates on offer," Swallow says.

Dunedin
Dunedin's residential property values decreased by 8% over the past year, an improvement on the 8.8% annual decline reported in March.

The average sale price in Dunedin eased slightly to $257,160. Dunedin is down 10.3% from its peak in July 2007.

David Paterson of QV Valuations says: "It is interesting to note that since the market peaked in July 2007, the majority of the decline we have seen in Dunedin occurred between April and August of last year. So although we are well down on a year ago, it seems that the market has been fairly flat down here for several months now".

"Last month we reported that the year-on-year change was evenly spread across all areas of the city. The figures this month show quite a difference, with the Peninsular/Coastal Dunedin area declining at a 4.7% compared with the 8% average for the city. By contrast, the Taieri area (which includes Mosgiel, Fairfield, Abbotsford and Green Island) declined by 10.1% and was the only area within the city to show an increase in the rate of decline. At this point the reason for this difference is not clear. The closure of the Fisher and Paykel plant has undoubtedly had some cumulative impact over the last six months," Paterson says.

"Another influencing factor may be the sale of spec homes completed after the market peaked. The Taieri area has seen a number of new residential sub-division developments over the last five years. Many of the sections have been sold to builders to build spec homes in the $450,000 to $550,000 range. Those who completed the building after the market softened have not realised previously established market prices, putting downward price pressure on new and existing homes in the $350,000 to $450,000 price bracket," Paterson says.

"There is still a great deal of uncertainty in the market, and even with very low interest rates, most buyers are taking a very conservative approach. There are opportunities for those who are in a sound financial position, and it would appear to be an ideal time to get back into the market. We are now moving into the traditionally quiet period over the winter and the concern is that the improvement seen in sale numbers in March was a bubble rather than a trend," Paterson says.