Residential highlights - October

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Auckland
Hamilton
Tauranga
Wellington
Christchurch
Dunedin

Auckland
Property values in the Auckland region increased by 2.5% over the past year (calculated over the three months ending October 2009 in comparison to the same period last year), a substantial improvement on the 0.6% annual growth reported in September. The average sale price for the region decreased slightly from $507,617 to $506,642.

"Within the Auckland region, conditions and trends seem to have changed very little over the last month.  Agents continue to report a lack of listings in many suburbs and across the various price brackets.  Demand remains strong from first home buyers and those trading-up.  A significant number of properties continue to be sold via auction, which is producing results ranging from many being passed-in to those that are exceeding vendor expectations. For general listings we are aware of multi-offer situations," said Glenda Whitehead of QV Valuations.

"Within Auckland City, demand in the price range of $600,000 to $900,000 in suburbs close to the CBD remains strong, with values well up on those achieved at the beginning of 2009. Listings in this price bracket are low, creating multi-offer situations and strong results at auction," Whitehead said.

"In Waitakere, our valuers report that more investors have come out of the woodwork, but their activity to date remains subdued. Building activity including renovations, new builds and infill housing is now noticeable.  Some activity is also evident in the higher price bracket in this City."    

"Within Manukau, demand from first home buyers and owner-occupiers appears to have returned in the newer suburbs of Dannemora and Flat Bush, which has resulted in mild price appreciation recently.   While investors are active in areas such as Papatoetoe and Manurewa, prices remain relatively stable" Whitehead said.

"On the North Shore we are now seeing an increased number of sales in excess of $2 million, particularly within the Milford/Takapuna area. However, to sell in this price bracket homes need to be substantially sized with an obvious coastal flavour. This portion of the market was stagnant in 2008, and although things are slowly moving now, prices are still not back to 2007 levels" she said.

"While there are obviously some buyers willing to push values up in order to secure property, we continue to see purchasers remaining cautious, setting their value limits and walking away where prices exceed their expectations."

Hamilton
Property values in Hamilton decreased by 0.1% over the past year (calculated over the three months ending October 2009 in comparison to the same period last year), a slight improvement on the 0.9% annual decline reported in September. The average sale price for the city decreased from $344,971 to $342,853.

Richard Allen of QV Valuations said; "Our statistics this month show that the slight backward value fluctuation we saw in last month was a slight aberration. The residential market in the city has stabilised for the time being."

"All four areas in the city experienced slight improvement, the largest being in the Central City/North West Hamilton area where property values increased from -0.2 % in September to 1.8% in October. The South East also improved from -1.2 % to -0.6%, although is not yet experiencing positive year-on-year growth. The South West improved from -1.4% to -0.9%, and Hamilton North East from -1.2% to -0.6%," Allen said.

"Whether or not this recovery will continue remains to be seen. The market has already absorbed a number of potential set-backs which appeared likely because of poor regional economic factors. It now appears that a sustained period of stability will ensue," he said..

Tauranga
Property values in Tauranga declined by 1.4% over the past year (calculated over the three months ending October 2009 in comparison to the same period last year), a slight improvement on the 1.8% annual decline reported in September. The average sale price for the region decreased slightly from $402,880 to $400,367.

"Talk of Tauranga's property market being a seller's market is a little bit misleading. Whether a buyer or seller holds the upper hand is largely dependant on the property's price bracket and location. We are seeing different parts of the market behaving quite differently," QV's Shayne Donovan-Grammer said.

"The first two weeks of October kicked-off well as one would expect for this time of year, but the last couple of weeks have seen the property market hit a flat patch. Talk of a capital gains tax is not exactly the news investors want to hear, which could see activity levels dwindle somewhat."

Wellington
Property values in the Wellington region increased by 1.6% over the past year (calculated over the three months ending October 2009 in comparison to the same period last year), an improvement on the 1.1% annual growth reported in September.

The average sale price for the region increased from $436,633 to $438,584. Wellington City Council ratepayers have recently received their updated Rating Values from QV. Rating Value changes are over two years and are therefore not comparable to the year-on-year figures quoted above.

"The shortage of listings in Wellington and the Hutt Valley continues. The traditional spring resurgence which we would normally see at this time of year is still holding off and is putting upward pressure on prices. Good homes are attracting competition amongst buyers, especially at tender which seems to be an effective sales method in this scenario," Pieter Geill of QV Valuations said.

"Interestingly, the upward price pressure seems to be localised to main centres. In more provincial areas of the Wellington region there seems to be more listings and less competition amongst buyers. Supply and demand are more balanced in these areas which is alleviating any substantial price increases for the time being. This situation is especially prevalent in areas where batches and second homes are traditionally popular," he said.

"There still appears to be mortgagee and distressed sales around, and I believe these will hover for the medium term. Although some borrowers are benefitting from the current floating rate, interest rates are rising again and unemployment is predicted to reach 7%," Geill said.

Christchurch
Property values in Christchurch increased by 1.3% over the past year (calculated over the three months ending October 2009 in comparison to the same period last year), an improvement on the 0.4% annual growth reported in September. The average sale price for the city increased from $348,922 to $352,962.

"Suburban Christchurch has held well with the southwest suburbs showing the greatest recovery, up 1.9 per cent year-on-year. This area is closely followed by the central and northern suburbs at 1.6 per cent.  Whilst these results are encouraging, they must be treated with caution. There are also signs of a heavily segmented, two-tier market," QV's Melanie Swallow said.

"In the entry-level part of the market, many properties are being taken to auction and are achieving very strong results, in some cases above what we would consider market value. This is fantastic if you need to sell, but those who are purchasing need to exercise caution. Competition is strongest in this part of the market, attributable in part to a shortage of stock available for sale."

"House prices in provincial areas are showing a slower recovery, with more balance between the volume of homes for sale and active purchasers. This might be more indicative of market characteristics yet to be experienced for metropolitan Christchurch. We expect this current trend to continue through the summer months."

Dunedin
Property values in Dunedin increased by 4.3% over the past year (calculated over the three months ending October 2009 in comparison to the same period last year), a substantial improvement on the 2.2% annual growth reported in September. The average sale price in Dunedin increased from $258,103 to $268,253.

"Residential property values in Dunedin have continued their strong recovery since bottoming out early in 2009. Our statistics show that this is the third consecutive month of positive annual growth within the city, with property values approximately 5.5% above the low of early 2009. This growth has been fairly constant for all parts of Dunedin. Values are still 5.4% below the peak of the market in July 2007 however," Tim Gibson of QV Valuations said.

"The market has again been driven by a lower number of properties entering the market, resulting in shorter selling times. This low level of listed property has resulted in a classic demand and supply situation where the high demand for properties has often resulted in multiply parties negotiating the price upwards," Gibson said.

"National building consents have also shown an increase recently. This could indicate that more property owners are choosing to renovate their existing homes, instead of selling and upgrading. This could be one reason why less property is going to market at present."