10 June 2009
Source: The Daily Move Channel
New research has revealed that residential property prices in the Land of the Long White Cloud are continuing to stabilise and values improved by a considerable amount last month, giving hope that the New Zealand market is bouncing back from the brink…
With both volume and median sale price of houses changing, economists are saying the property market – a leading indicator of the whole New Zealand economy – is slowly improving.
The QV national residential property index for May highlighted a more positive future for the New Zealand property market.
After months of falls, prices now appear to be stabilising and the index shows a dramatic improvement in values.
Overall property prices fell by 8.1 per cent over the past year – an improvement on the 9.2 per cent decline reported for the year to April and was the second month in a row where the year-on-year change had improved.
The Real Estate Institute of New Zealand (REINZ) said that the number of houses sold was up nearly 40 percent on last April, though turnover fell seven per cent from March to 6210.
The national average sale price fell to $371,600NZD in May from $373,100NZD in April and was 4.1 per cent lower than the same time a year ago.
This drop in sale prices is being attributed to an increase in activity at the lower end of the market – of late, minimal activity has artificially inflated prices but now that is set to change.
New Zealand cities were also celebrating as the British Economist survey ranked two major NZ centres – Auckland and Wellington – as amongst the most liveable cities in the world.
Property values in all main cities increased slightly in recent months possibly due to the low interest rates on offer, causing people to return to the market.
QV’s Glenda Whitehead said, “It is clear that investors are now back in the market along with first time buyers and those looking to upgrade.
“This improvement is due to the continued stabilisation of property values in recent months and contrasts significantly to a market that was declining sharply 12 months ago.”
The median of 42 days to sell a house in April improved slightly on the 44 days it took in March and in April 2008, and significantly from February’s 55 days.
House sales continued to be strongest in the under $400,000NZD price bracket, accounting for nearly 4000 of the total April sales.
As New Zealand is now well into winter (whilst us Brits enjoy our baking hot barbecue summer?!) property transactions will begin to slow once more.
“This seasonal decline will provide a true test as to whether the recent property market revival will continue,” concluded Ms Whitehead.