11 May 2009
The decline in property values has improved for the first time since September 2007, suggesting the housing market freefall could soon be over.
Quotable Value monthly statistics showed national property values decreased 9.2 per cent in the year ending April 30 a slight improvement on the 9.3 per cent reported in March.
QV spokesman Blue Hancock said the April figure was because of a stabilisation in prices paid during the past few months.
Property values in the main centres had flattened, with figures for Wellington, Auckland, Hamilton, Christchurch and Dunedin all improving.
Tauranga was the only main centre to decline.
Prices in most provincial centres had also steadied, prompting an improvement in figures for Rotorua, New Plymouth and Palmerston North. Figures for Napier, Hastings, Wanganui, Nelson and Marlborough had worsened.
Increased sales activity in February and March had carried through into April, resulting in a shortage of listings, particularly in lower-value properties, Mr Hancock said.
“Lower interest rates and cheaper properties are leading first-home buyers and investors back into the market.”
Homeowners were also weighing up their situation, with some choosing to stay put and renovate, while others saw great opportunities to upgrade as the upper end of the market became more affordable, he said.
“Recent stabilisation of property values in many areas suggests that we may be near the bottom of the market.”
QV expected values to remain relatively flat over the winter months, but the threat of rising unemployment could affect an increasing number of homeowners and potential home buyers lowering values again.
Property values in Wellington fell 8.5 per cent in the year to April, a recovery on the 8.7 per cent reported in March.
QV Wellington valuer Pieter Geill said a potential drop in supply in the next few months could boost property values in the region.
Some homeowners continued to feel the pinch, leading to forced or pressed sales, he said.
“There is still some good buying out there.”
Tommy’s Real Estate director Tommy Heptinstall said there was a definite shortage in house sales listings.
“People have been reading all the doom and gloom and they are terrified to sell. But there is still the same amount of buyers in the marketplace.”
The average sale price dropped from $378,399 in March to $372,981 in April, due to more sales at the lower end of the market.
National property values are 9.6 per cent below their peak in January 2008.
House property values in Napier and Hastings fell 10.2 per cent and 9.7 per cent respectively in the year to April.
Values in Wanganui dropped 3.8 per cent and they slid 10.2 per cent in Palmerston North.
Figures for Nelson and Marlborough fell 7.6 per cent and 10.1 per cent respectively.