New Zealand Residential Property Market Still In A Slump

Slow October sales, along with some price decline, reflects the recent slump in New Zealand’s residential real estate market, however, the market is starting to show signs of …

Slow October sales, along with some price decline, reflects the recent slump in New Zealand’s residential real estate market, however, the market is starting to show signs of stronger activity. With all but the best properties languishing on the market, owners have been reluctant to list homes. See the following article from Property Wire for more on this.

Residential real estate prices and sales in New Zealand are falling but the latest reports show that good quality properties in good areas are selling.

Prices fell slightly in October and are now 5.5% below their market peak in late 2007, according to the latest QV Valuations report.

But the real estate market in Canterbury, which slowed dramatically after the earthquake which hit the city in September, is now beginning to pick up. However, it is taking longer for sales to go through because additional engineering reports are required.

‘We have seen a small lift in property values across Christchurch city over October, but only in suburbs where there has been little or no earthquake damage. In such areas, agents report demand for quality housing, with some healthy sale prices being achieved,’ said Melanie Swallow of QV Valuations.

Nationwide there are plenty of properties for sale but many have been on the market for a long time. The number of new properties was lower than usual for this time of the year, the QV report also shows.

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‘The low level of sales activity we have seen all year continued through October, with sales well below both last year and the long term average. There is no sign of the traditional spring surge in sales and we don’t expect any significant increase in sales before the New Year,’ said research director, Jonno Ingerson.

However, good quality properties in good areas were still attracting plenty of interest, and were selling for good prices, Ingerson said.

Across the country values were declining, although there was considerable variability within the regions, QV said. The Auckland area showed signs of stabilization during October with values 1% below March. The average sales price for the Auckland region during October was $521,526.

Values in Wellington have declined 3.4% since March, more than any other main center. However indications were that the market there may be starting to pick up pace, in line with better weather experienced in the capital.

Meanwhile the Real Estate Institute of New Zealand (REINZ) shows just 3,903 properties were sold in October, the lowest October total since REINZ records started in 1992.

The volumes were only slightly above the all time record low for any month of 3,666 in January this year and are down 36% from last October. And they are slower that at the height of the recession in 2008.

The median house price was unchanged at $350,000, but the stratified House Price Index, which removes the distortions from sales of more expensive or cheaper properties from month to month, fell 0.9% in October from September.

The Auckland City market was hit the hardest with prices falling to $483,500 last month from $525,000 in September. Wellington property prices fell from $398,500 in September to $390,336 last month. While prices in Christchurch held steady at $338,000 during October.

REINZ spokesperson Peter Thompson said that the usual spring influx of listings had been late across the country this year but activity was picking up and the November figures should be better.

‘People planning to change houses appear to have held back on listing their current homes until they see what else is available and how the market is moving,’ Thompson said.

This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.

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