Figures from Quoteable Value for June show house prices nationwide rose 0.4% in the June quarter from March quarter as signs of stability returned to the market and a general shortages of listings appeared across the market. (Updates with charts and fall from peak). QV's index shows prices were down 10.7% in June from their peak in January 2008, having fallen 11.2% from peak to trough in April. Prices were virtually unchanged in May. Here is the full statement below from QV, including commentaries on regional markets.
The QV national residential property indices for June released today show a 7.1 per cent decline in property values over the last year. This is a further improvement on the 8.1 per cent annual decline reported last month, and reflects continued stabilisation of the property market. 
Two thirds of the 7.1 per cent decline over the past year occurred between July and October 2008. Further slight declines continued through until April 2009, and since then values have increased slightly. Over the past quarter, nationwide values have increased 0.4 per cent based on the index, compared to the previous quarter when values fell 2.1 per cent. The national average sale price also increased to $378,535 in June from $371,555 in May. QV Valuation Manager Glenda Whitehead said "the volume of sales is approaching more normal levels, and the market is more stable. Decreases in property values over the past eighteen months combined with historically low mortgage interest rates have led to improved optimism and encouraged more buyers back into the market". "There appears to be a general shortage of properties for sale across the country. Lower mortgage rates have enabled many homeowners to re-fix their mortgages at lower rates for three to five years. This has either eased financial pressures so they no longer need to sell, or have led to homeowners deciding to stay put rather than sell and end up on a higher interest rate. Other potential sellers are holding back and waiting for values to increase again, or the winter weather to abate." said Whitehead. "Many vendors have now adjusted their price expectations to current market levels. There is increased interest in the market in general, but more so, in good quality properties, often leading to multiple competing offers. Poorly presented properties need to be priced correctly to ensure they find their buyer" said Whitehead. There are mixed opinions about the where the market will go over the coming months according to a recent survey carried out on QV.co.nz. An increasing number of people believe that the worst of the decline is over, and that now is a good time to buy before the market picks up again. A smaller group believe that worsening economic conditions both in New Zealand and overseas will lead to further house price decreases. Concerns over job security, recent rises in interest rates, and tighter lending conditions are acting to curb some of the recent buyer enthusiasm. There has been an increase in the number of people intending to buy in the next twelve months, but fewer who intend to sell, which may lead to further shortages of properties for sale. The changing balance of these buyer and seller sentiments will shape the market over the coming months. Property values have increased in most of the main centres over the last quarter. As a result, there has been an improvement in the annual change in all areas. In the Auckland area the annual change has improved to -5.9 per cent from -7.6 per cent last month. Hamilton has improved to -6.6 per cent, the Wellington area to -6.5 per cent, Christchurch to -7.3 per cent and Dunedin to -4.5%. Tauranga was the only main centre to show a continued slight decline over the last quarter, but the annual change in values has still improved to -8.0 per cent from -9.4% last month. Slight increases in property values in recent months have also led to improvements in the annual change in most of the provincial centres. Whangarei improved slightly to 12.4 per cent, Rotorua improved to -8.1 per cent, Gisborne to -13.4 per cent, New Plymouth to -3.3 per cent, Palmerston North to -8.4%, Queenstown Lakes to -7.0 per cent and Invercargill to -8.2 per cent. Property values in Wanganui have continued to decline in recent months so the annual change has worsened to -6.0 per cent.Auckland Auckland Property values in the Auckland region declined by 5.9% over the past year (calculated over the three months ending June 2009 in comparison to the same period last year), an improvement on the 7.6% annual decline reported in May. The average sale price for the region increased from $483,397 to $489,444. Glenda Whitehead of QV Valuations said; "Steady as she goes, or more of the same, whichever way we say it, it should be seen as positive given the continuing uncertainty within wider economic indicators. More balanced pricing conditions are providing purchasers and vendors with a greater degree of certainty. While low listing levels increase the focus on what is for sale, buyers' caution and finance issues are leading the market into calmer waters. It is widely accepted that we are unlikely to see any significant capital gain in the short to medium term, so buyers are not pricing this into their offers. Likewise, investors are buying on cash-flow. Securing finance is key to many deals eventuating and it seems as though prices achieved depend on the ability of parties to negotiate. Job security is still creating uncertainty so people are not committing beyond their means". "Quality properties are attracting good interest, while poorly presented homes sit until asking prices are reduced. Mortgagee sales continue to impact on the market place, with some reportedly selling well, while others sell at substantial discounts when poor presentation and general uncertainty comes into play" said Whitehead. "On another positive note we are seeing more activity in the medium price bracket in Auckland over $500,000, in suburbs such as Ellerslie and Mt Eden. This could indicate that the trading-up option represents good value, or perhaps reflects a greater degree of confidence by those selling and buying within that value range. As listings are limited in many areas, we are seeing multi-offer situations and good activity at open homes. This lack of stock could be attributed to winter, as many people choose not to sell when their property does not look its best. Let's also not forget that it costs to sell, and if equity levels are low following the recent drop in values, selling costs only reduce equity further. For many staying-put is more palatable, as long as mortgage repayments can be met" said Whitehead. Hamilton Property values in Hamilton declined by 6.6% over the past year (calculated over the three months ending June 2009 in comparison to the same period last year), an improvement on the 7.5% annual decline reported in May. The average sale price for the city decreased from $346,274 to $337,851. Mr. Richard Allen of QV Valuations said; "For the forth consecutive month the rate of annual decline in the Hamilton region's housing market has recovered slightly. The 0.9% improvement from May is further evidence that the market has stabilised over the last quarter. The exception to the rule was North East Hamilton which showed a 6.6% annual decline in June, a similar level to that reported in May" said Allen. "This continued recovery in our figures for the city confirms our comments from last month that house prices have flattened. However, as stated last month, I am of the opinion that this stabilisation may only be an aberration, and that a lack of demand as we progress further into winter will put more downward pressure on residential property prices in Hamilton and the Waikato" said Allen. Tauranga Property values in Tauranga declined by 8.0% over the past year (calculated over the three months ending June 2009 in comparison to the same period last year), an improvement on the 9.4% annual decline reported in May. The average sale price for the region increased slightly from $425,621 to $427,927. Russell Oliver of QV Valuations said; "Although the market stabilisation we have experienced in the last few months has continued into June, the macro-economic environment could undo this pretty quickly. There is still a bleak outlook for agricultural and employment sectors and it will be interesting to see how this affects values for the rest of the year". "Acting in the favour of property values and helping the current stability is the lack of listings available. It seems to be a country-wide phenomenon which has not overlooked Tauranga. For those who do list there seems to be a commitment to meet the market. On the buyers side there may be the perception that the market has levelled which is fuelling their willingness to buy. This being said, there is still a great deal of pressure and uncertainty on a lot of folk, which I believe will hinder any prolonged recovery in the near future" said Oliver. Wellington Property values in the Wellington region declined by 6.5% over the past year (calculated over the three months ending June 2009 in comparison to the same period last year), an improvement on the 7.4% annual decline reported in May. The average sale price for the region increased from $424,411 to $430,939. Mr Pieter Geill of QV Valuations said; "The continued stabilisation of Wellington's residential property prices is following the trend of the last couple of months. It is probably due to the undersupply we have seen and are still seeing across most sectors of the market. There appears to be a surplus of buyers over vendors, which is attracting multiple offers on some properties. At times this is resulting in much healthier prices compared to late last year and early this year. It is very hard to generalise this across the whole market however, as competition amongst buyers is inconsistent". "Investors are active but sticking to their guns and only buying if the numbers stack up. Starting with the required return on investment and then working backwards towards an offer seems to be a common tactic. If an offer does result it is normally on a take-it-or-leave-it basis, with emotion taking a back-seat in the process" Geill said. "While many people feel that we will see further falls in value through winter, current indicators point to it being a good time to sell because of the limited competition out there. In saying this, there are still good buying opportunities as we are seeing moderate volumes of mortgagee sales entering the market alongside other opportunities. Predictions of increasing unemployment levels may exacerbate the situation so while we are talking of this continued stabilisation, there are wider economic factors at play which may tip the balance either way" said Geill. Christchurch Property values in Christchurch declined by 7.3% over the past year (calculated over the three months ending June 2009 in comparison to the same period last year), an improvement on the 8.1% annual decline reported in May. The average sale price for the city remained steady at $339,962. Melanie Swallow of QV Valuations said; "These numbers need to be treated with caution as the same period last year was a time of decline, measured against the month ending June which shows a period of flattening. However, it can still be viewed as a positive sign as far as market sentiment goes". "Suburban Christchurch has held well, with the central, northern, eastern and hill suburbs all showing a slight improvement year-on-year. The hill suburbs have shown the largest recovery and are closely followed by the eastern suburbs" said Swallow. "The market is now showing clear segmentation in the level of activity. Over 90% of the sales which occurred in June were in the under $500,000 price bracket, with most of those actually occurring under $300,000. In this sector of the market anecdotal evidence from Real Estate Agents also shows multi offer situations, good success at auctions and an overall shortage of listings. Properties over $500,000 are slow in general, with the top end properties over $1,000,000 extremely slow to move. The lifestyle property market has also shown continued signs of softening. Again, job security appears to be a key driver in purchasing decisions" said Swallow. Dunedin Property values in Dunedin decreased by 4.5% over the past year (calculated over the three months ending June 2009 in comparison to the same period last year), an improvement on the 5.4% annual decline reported in May. The average sale price in Dunedin decreased from $264,180 to $256,493. Mr. David Paterson of QV Valuations said; "The figures reflect a continuation in the trend reported over the last three months. When analysing monthly value changes, Dunedin City may be showing the first signs of a slight upturn in values and it appears to be ahead of the other main centres in this regard. This may well be because the decline started earlier and was more abrupt in Otago than in other centres". "While the improvement outlined in the figures is positive, the wider economic forces make it very difficult to say whether this trend will continue through the winter period. While the figures do indicate prices have reached a plateau, there are still commentators suggesting values could drop further over the next 12 months. This type of comment, along with concern about long-term job security, has resulted in many potential buyers staying out of the market for the time being" Paterson said.
My view On Friday I revised my view on house prices to a peak to trough fall of 15% from 30%. Here is the full article. Your views? Comments below please
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