Even though the month of June is normally a slow month for sales, this year it was especially dismal for New Zealand real estate. Distressed sales are contributing to price weakness, while buyers can afford to be choosy, despite diminished new supply. See the following article from Property Wire for more on this.
Residential property values in New Zealand are 5.2% higher than they were a year ago but are declining, new figures show.
The latest data from valuations company QV show that values in June were 4.3% below the market peak of late 2007, having been 4.1% lower in May and 3.9% lower in April. The June figure is down from a 5.6% increase reported in May, which was the first annual decline in the value change since March 2009.
In Auckland values are 7.9% above last year, down from the 8.8% reported for May. The increase in the Wellington area slipped to 5.4% in June from 6% the previous month and in Christchurch they fell from 5.9% to 6.2%. In some provincial areas values are lower than they were a year ago with Whangarei down 1.1%, Rotorua down 2.1% and Gisborne down 0.9%.
Claim up to $26,000 per W2 Employee
- Billions of dollars in funding available
- Funds are available to U.S. Businesses NOW
- This is not a loan. These tax credits do not need to be repaid
But while values calculated using QV indices had declined, the average sales price in June increased slightly from $403,070 to $404,715. That was due to a change in composition of the sales taking place, and showed the unreliability of using average sales prices to measure value change, QV said.
Glenda Whitehead of QV Valuations said no evidence had shown up so far that May’s budget is having any dramatic impact on the property market. Any effect is likely to take effect during the next 12 months as various tax changes are implemented and depend on whether investors decided to sell as a result of the budget measures.
Whitehead said that at present property sellers with unrealistic price expectations were being bypassed by purchasers. ‘Buyers continue to be very cautious and selective in their purchasing decisions. Properties with perceived flaws such as structural problems, or poor maintenance, or perhaps at a greater distance from town, are proving harder to sell,’ she explained.
Distressed property sales are still having an effect on the market by subduing price levels in areas where they are available and potentially cheaper than non-stressed sales. Sales numbers are around 20% below the long term average, with a decline in activity typical for this time of the year as winter set in.
‘There also appears to have been an easing in the number of new properties coming on to the market, which is a normal trend for this time of the year. There is still plenty of choice for the few buyers actively searching,’ added Whitehead.
A separate report shows that sales fell to their second lowest volume in June. The figures the Real Estate Institute shows that total residential sales fell to 4,575 last month from 5,206 in May, and 6,040 in June last year. It is only the second time in the past 10 years that a June month has recorded fewer than 5,000 sales, the first being in 2008.
The median number of days it takes to sell a property rose to 45 from 43 in May and 41 days in the same month a year earlier, and is 15 days longer than when the property boom peaked in 2007, the data also shows.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.