QV reports NZ house values flat in May and still 5.7% below peak of late 2007; Auckland values rising; Wellington values falling. Your view?

By Bernard Hickey

Government-owned valuer Quotable Value has reported nationwide house values were flat in May and remain 5.7% below their peak in late 2007.

However, it said values were edging higher in Auckland, but were falling in Wellington, Hamilton and Tauranga.

“Nationwide property values have now remained steady for the past six months, after having declined in the six months prior to that. Values are now 1.6 percent lower than the same time last year, and 5.7 percent below the market peak of late 2007,” said Glenda Whitehead of QV Valuations.

“While values remain static at a nationwide level, there continue to be differences between regions, with Auckland and Wellington showing contrasting trends,” Whitehead said.

“Values in the Auckland area have moved within a narrow range since the beginning of 2009. In the past few months they have begun to edge upwards and are currently 1.2 percent above January, 0.3 percent above the same time last year, and only 1.8 percent below the market peak of late 2007," she said.

"Values in Hamilton remain 3.5 percent below the same time last year, while in Tauranga values have levelled in recent months and are now 1.8 percent below last year. In the Wellington area values continue to decline slightly after rallying in late 2010 and early 2011, and as a result are 3.6 percent below the same time last year. In Dunedin values have been more or less stable since the beginning of the year and are now 2.5 percent below last year,” she said.

“Sales activity dropped away in late April coinciding with Easter and the school holidays, but recovered in recent weeks."

Provincial cities struggling

QV said there was evidence that first home buyers may be active in the market again, perhaps encouraged by lower interest rates and easier lending criteria.

"The Christchurch market remains fragmented with strong demand for properties in the north-western suburbs as well as the outlying towns in the Selwyn and Waimakariri Districts. In contrast there has been very little sales activity from within the more damaged suburbs of Christchurch. It appears as if overall sales activity has slowed down as we come into winter. The lack of sales means that we have not calculated a May index for Christchurch.”

While unrelated to the QV index, and a less reliable measure of value change, the average New Zealand sales price over the last three months was NZ$404,057, down slightly from the NZ$405,310 reported last month.

QV reported variable value movements between the provincial centres with Whangarei (-5.5%), Gisborne (-5.2%), Wanganui (-5.0%) and Palmerston North (-4.2%) are all well below this time last year. The gap is more moderate in Napier (-3.3%), New Plymouth (-3.4%) and Invercargill (-3.4%), while in Rotorua (-1.1%), Hastings (-1.4%), Nelson (-0.9%) and Queenstown Lakes (-0.8%) values are only slightly below last year.