Property value assessor Quotable Value reports that the New Zealand residential real estate sales have hit a four-year peak as increasing demand and shrinking supply fuel the market, despite increasing values in nearly every sales sector. Property values have risen 1.1% in the last three months and 2.7% on the year, which has created some hesitancy among prospective buyers, but demand is sustaining a seller’s market. Prices are falling in provincial areas and the overall average value still remains below that of the peak in 2007, but experts have a positive outlook moving into the new year. For more on this continue reading the following article from Property Wire.
Residential property sales in New Zealand increased to a four year high in January and prices continue to warm up in most big cities due to limited supply and higher demand from migrants and first time buyers.
However, prices and sales are more subdued in provincial areas and remain well below their 2002 to 2007 boom levels, the latest data from government owned property valuer Quotable Value (QV) shows.
Its monthly survey of property values nationwide shows values are have risen 1.1% in the last three months and are up 2.7% from a year ago. The QV index, however, remains 3.3% below its late 2007 peak and prices are falling again in provincial areas.
‘While national values are continuing to increase, this is not universal across the country. While the combined main urban areas and combined rural areas have increased over the past few months, the combined provincial areas have begun to slide back again,’ said QV research director, Jonno Ingerson.
‘There appears to be a little more market activity since the New Year, with signs that decisions made over the holiday break are now being put into action. However potential buyers remain cautious and calculated and are often unwilling to commit quickly,’ he explained.
‘The increase in values in many areas, particularly central Auckland, can in part be attributed to a lack of supply, with a shortage of desirable and well presented properties for sale. When quality properties come up for sale in these areas they are in high demand which is tending to push the price up,’ he added.
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Values in the Auckland area are increasing the fastest of any of the main centres, up 2.1% over the past three months and up 5.1% over the past year and are above the previous market peak by 1.9%.
The old Auckland City continues to be the strongest performing area within Auckland, up 2.7% over the last three months, up 7.2% over the year, and now 4.4% above the previous market peak.
North Shore has shown slightly slower value growth but is still up 4% over the year and 0.9% above peak. Across the rest of Auckland values are up over the last year by between 2.5% in Franklin to 3.2% in Waitakere. The exception is Rodney where values have been volatile over the past few years and are now1.6% above last year.
Values in Hamilton have once again stabilised in the past few months in what is probably a long term trend. This follows a slight short lived recovery in late 2011. Values are now 0.5% above the same time last year and 11% below the 2007 market peak.
In general, Tauranga values have been increasing very gradually over the past year, up 1.1% over that period, but remain 10.9% below the 2007 market peak.
‘Tauranga has started 2012 well with a good level of activity in the market. This is perhaps even a little more than expected but in line with what has happened this time of year in years gone by. While activity has improved though, prices have remained stagnant,’ said QV valuer Shayne Donovan-Grammer.
Over the past year, values in the Wellington area first fell a few percent, then recovered most of those losses since mid 2011, leaving current values just 0.4% below the same time last year and 6.2% below the 2007 market peak.
‘Despite increased market activity, prices are generally quite static throughout Wellington. Properties in the lower price brackets are meeting the greatest demand although it is still important for all sellers to present their properties well and to price them sensibly,’ said QV valuer Kerry Buckeridge.
Values continue to increase in Christchurch, as they have been doing since just after the February 2011 earthquake, and are now 3.7% above the same time last year and just 0.7% below the 2007 market peak. The areas immediately surrounding Christchurch have continued to show strong value growth, with Waimakariri District 10.5% up over the year and 5.2% above the 2007 peak, and Selwyn District 8.7% up over the year and 5.3% above the 2007 peak.
‘Areas like the north west of Christchurch continue to benefit from good demand from purchasers. Open homes are busy and resulting in a multiple offer situations for the vendors. This is particularly the case for houses in under $400,000 with demand being fuelled by a steady stream of payouts to red zone home owners,’ explained QV valuer Richard Kolff.
In Dunedin values have been increasing since August 2011 and are now 3.4% up over the past twelve months and 4.2% below the 2007 peak.
‘The Dunedin property market is seeing increased outside investment due to the affordability of Dunedin values. Buyers are becoming more active and we are seeing some multiple offer scenarios occurring. The lower to mid bracket properties are the most popular with increased demand stimulating the growth shown,’ said QV valuer Tim Gibson.
This article was republished with permission from Property Wire.