Property values turn positive - finally

Nationally, values are 0.2% above October last year, up from the -1.1% reported last month.

Values across New Zealand are now 3.4% up from their low in April, although still remain 6.6% below the market peak of late 2007.

A further market measure, distinct from the index, is the national average sale price which also increased slightly to $389,198 in October from $387,567 in September.

However, there remains a shortage of properties on the market which is inevitably causing an imbalance within the market and pushing prices higher.

"Market activity remains below normal spring levels. The number of sales has remained relatively static over the past few months, and there is little evidence of an increase in new listings in most areas" said QV Valuation Manager Glenda Whitehead.

Whitehead says the continued shortage of properties is leading to a continued imbalance in the market, with more buyers than properties available, especially in urban areas.

"As a result our valuers are seeing many properties sell for well above their expected values. These demand-based price increases are likely to continue until the balance in the market changes."

She says the imbalance will right itself "either when more properties come onto the market, or when buyers consider prices to be beyond their affordability and as a result consider other parts of the market, or resolve to continue their current living arrangements".

The lack of traditional spring activity could be due to several factors, according to the QV figures..

"Many owners will have locked in to lower long-term interest rates at the beginning of the year and will be concerned about losing those rates if they sell. Having made the decision some months ago to stay put, they may now be extending or renovating and no longer be considering selling" said Whitehead.

"While it is clearly a good time to sell, especially in the main centres, needing to buy again in a market which has a shortage of available properties for sale will also be putting some people off."

Values in the main centres have recovered considerably since earlier this year. As a result, most of the main centres now have values above the same time last year.

In the Auckland Area values are now 2.5% above last year, the Wellington Area is 1.6% up, Christchurch 1.3% up, and Dunedin 4.3% up. Hamilton is only 0.1% below last year, while Tauranga remains the only main centre to be below last year at -1.4%.

To view more on the main regional centres, click here.