New Zealand property values continued to stabilise in May with cheaper mortgage rates making housing more affordable, after a rough year in 2008.
House values fell 8.1% in the 12 months ended May 31, compared to a 9.2% decline in April, and was the second month-on-month improvement since September 2007, according to QV Valuations. The average sale price fell to $371,555 last month from $372,981 in April, and is now 4.1% lower than the same time a year ago.
"The recent buoyant activity in the residential market has been fuelled by people taking advantage of lower mortgage interest rates," said spokesperson Glenda Whitehead. "The recent stabilisation in values indicates that the wider market is moving toward some form of equilibrium."
Recent data releases from the Real Estate Institute, Barfoot & Thompson, and Harcourts New Zealand all noted a pick-up in the property market, while the ANZ National Bank's eight gauges of the sector predict it's "showing signs of life". The ANZ said the overall tone is negative as unemployment rates were still uncertain, but rising migration should stoke demand in the short-term.
Whitehead said the coming winter months were traditionally slow for the sector, and "will provide a true test whether the recent property market revival will continue."
QV said it would be difficult to predict where property prices will go to from here, but noted migration, mortgage rates and employment have been "strong drivers".
In Auckland property values slowed its annual decline to 7.6% in a rolling three month period ending May 31, from 9% in April, while the average sale price slipped to $483,397 from $486,986. Hamilton property values improved to a 7.5% decline in the three months ended in May from 8.8% the month before. The average price gained to $346,274 from $336,091.
Tauranga property values fell 9.4% from a 9.9% drop in the previous period, as the average sale price fell to $425,621 from $432,461. In Wellington, values fell 7.4% slowing from the 8.5% annual decline reported in April. The average sale price remained steady at $424,411.
Christchurch property values fell 8.1% from 9.6%, with the average sale price slipping to $339,695 from $342,929. Dunedin property values fell 5.4% in the three months through May from a year earlier, from the 8% annual decline in the period through April. The average sale price increased to $264,180 from $257,160.
To find out more about what's happening in your region, read the QV regional highlights - May 2009.