Property values show hint of stabilisation: QV

Monday 11 May 2009

New Zealand property values fell 9.2% last month, a slight improvement from the previous month's 9.3% decline, suggesting the recession-induced slide is abating.

By The Landlord

April's result marked the first month-on-month improvement since September 2007, according to QV Valuations.

The average sale price fell to $372,981 last month from $378,399 in March, which QV said reflected more sales being made at the lower end of the market.

"Recent stabilisation of property values in many areas suggests that we may be near the bottom of the market," said Blue Hancock, spokesman for QV Valuations.

"We expect values to remain relatively flat over the winter months, although the threat of rising unemployment may affect an increasing number of homeowners and potential home buyers."

Reserve Bank Governor Alan Bollard last month slashed the official cash rate to a record low 2.5% and said rates would stay low until the second half of 2010, a comment seen as directed at longer-term fixed mortgage rates, which have stayed stubbornly high in the face of a sliding OCR.

Banks tend to fund their longer-term mortgage books by borrowing overseas, meaning the OCR doesn't have as much impact.

"Lower interest rates and cheaper properties are leading first home buyers and investors back into the market," Hancock said.

In Auckland, the annual decline in property values slowed to 9% last month, from 10.1%, while the average sale price fell to $486,986 from $495,892.

Hamilton property values improved to an 8.8% decline in the three months ended in April from a 9.3% slide in the period through March. The average price fell to $335,091 from $338,433.

Tauranga property values fell 9.9%, from an 8.7% drop in the previous period, while the average sale price fell to $432,461 from $436,012.

In Wellington, values fell 8.5%, slowing from 8.7%, while the average price slipped to $424,076 from $429,848. Christchurch property values fell 9.6% from 9.7%, with the average sale price declining to $342,929 from $349,442.

In Dunedin, property values fell by 8% in the three months through April from a year earlier, an improvement from the 8.8% annual decline in the period through March. The average sale price eased to $257,160. 

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