Hopes for spring housing recovery evaporate

There is now little expectation of a spring recovery for the residential property market, Government owned valuer Quotable Value (QV) said, citing the global economic meltdown and school holidays. National residential property values for the three months ended September 2008 are down 5.8% from the same time last year, with Auckland house price values down 7%. The latest figures cast a shadow over predictions from real estate agents of a spring pick up in the residential market. "Indications last month that a more optimistic mood had come over the market have since evaporated," said QV spokesman Mark Dow. "We are moving into an economic recession and there is plenty of speculation that things will get worse before they get better. Uncertainty about the impact of the global credit crisis, the usual lack of activity prior to an election, and significant tightening of lending policies by the banks is contributing to pessimism in the property market and there is little expectation of any spring resurgence. The requirement to have a significant deposit will take many first home buyers and investors out of the market, reducing demand and putting further downward pressure on prices," Dow said. Residential property values in Auckland for September continued to fall, down 7% from September last year, following a 5.8% decline in the year ending the three months to August. September values in Auckland City's Eastern suburbs were down 9.4% from the same time last year. Central Auckland values fell 7.8% and North shore values fell 6.2% from September last year. "Until a couple of weeks ago, QV valuers reported that they were beginning to see a pick up in spring activity. However, the latest round of world financial issues, and potentially the influence of the school holidays, has left the market place very dull at present," said QV's Glenda Whitehead. "Spring traditionally brings an increase in activity in the housing market. However, the current environment of deteriorating conditions, negative sentiment and an election, is dampening any signs of a spring recovery," Dow said. In the major centres, Hamilton residential values saw the biggest fall, down 8.8% from September last year. Wellington values fell by 5.4% over the year, fueled by a decrease of 8.6% in Hutt City, while Christchurch values decreased 7.1% over the year ended September and Dunedin values decreased 8.5%. Overall, values in the main urban areas were down 6.8% from September last year, following a fall of 5.6 in the year ended August 2008. In provincial centres, residential property values in Gisborne fell 10.1% over the year ended September, which was a slight improvement on the fall of 10.4% in the year ended August 2008. Tauranga values fell by 7.6% and residential values in Palmerston North fell 9.4% over the year. Values in Southland fell by 4.2%, showing a slight recovery after falling 11% in the year to August 2008.