QV's October statistics released today report growth in national property values of 12.7% over the past year (calculated over the three months ending October 2007 in comparison to the same period last year). This has eased from 13.2% reported in September and is the second month the rate of increase has dropped. The average sale price for New Zealand residential properties increased slightly to $406,176.
"The effect of higher interest rates and lessening buyer confidence is now reflected in a general slowdown in market activity and a shift from a sellers market towards a buyers market" said QV spokesperson Blue Hancock. "Recent market indicators confirm that many people do not believe it is the right time to buy" said Mr Hancock.
"Purchasers are being careful and taking a longer time to buy property. Developers and investors are also acting cautiously and seem willing to wait for further market signs to appear. Activity is patchy across a number of regions including the main urban centres. All predictions are for a gradual easing in the market overall, with the pace of any slowdown determined by the spring and summer activity" said Mr Hancock.
All the main urban centres, except Hamilton, reported easing growth in property values. Auckland City decreased to 11.9% (12.1% last month). Wellington City property values dropped to 13.7% (down from 14.1% reported last month), Christchurch eased to 12.3% from 13.1% and Dunedin slowed to 9.4% from 10.4%. Hamilton increased to 15.8% from 14.4% last month.
Most of the provincial centres also reported flattening property values. Gisborne's recent strong growth eased to 20.4% from 21.8% last month. Tauranga dropped to 7.7%, Palmerston North to 12.4%, Nelson to 12.9%, and New Plymouth was flat at 9.8%. However, some provincial centres continued to increase. Napier's growth in values leapt to 7.2% from 4.9% reported last month, and Queenstown and Invercargill both continued their strong growth, increasing from 10.8% to 13.7%, and 34.6% to 36.4% respectively.