Monday, August 11, 2008

Property values continue to drop

Residential property values have dropped almost all over the country and the market is well off its peak, according to QV Valuations.

There was a 2.2 percent decline in national property values in the past year in the data which compares the three months ended in July with the same period a year ago.

Invercargill was the exception to the drop in values in main urban areas. It had year-on-year growth of 5.4 percent but this has dropped from a high of 36.4 percent last October. QV Valuations said at the current rate of decline Invercargill will join the rest of the main centres with falling property values within a month or two.

Blue Hancock of QV Valuations said the market was now well off its peak of late 2007, early 2008 and many sellers had accepted the state of the market and had dropped their expectations accordingly.

This has resulted in an increase in activity in the market, but sale levels are still well below last year's and long term averages.

"The question has now changed from when will prices stop rising, to when can we expect to see them stabilise?" said Mr Hancock.

Property values are down 3.6 percent in Auckland compared to the same time last year, which is a bigger decline than the 1.0 percent reported last month. The Wellington area is now showing declining values. Wellington property values decreased 1.6 percent in the past year when they had recorded 1.1 percent year-on-year growth in June figures.

Christchurch has dropped 2.1 percent and Dunedin suffered the biggest drop in the main urban areas, at 6.8 percent. Hamilton City's property values slipped 5.4 percent and Tauranga to 2.6 percent.

QV said most provincial centres now show property values are less than what they were in the July quarter last year. Gisborne has suffered the biggest provincial centre drop at 8.7 percent. O ther drops in provincial centres were Palmerston North (5.2 percent) Nelson (2.7 percent) and Queenstown Lakes (3.1 percent) Napier (2.0 percent) and New Plymouth (4.7 percent).

Opotiki had the biggest drop in property values in New Zealand, at 9.9 percent.