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Property values still down but stabilising - QV

Christchurch and Nelson are the only places to have seen residential property values increase on last year, according to the latest QV Residential Property update.

The QV report claimed that despite the gradual nationwide decline, the rate has been slowing and values remained unchanged between December and January.

Values are 1.5% below a year ago and 5.8% below the market peak of late 2007.

"Values across the combined main centres have been stabilising, while across combined provincial and rural areas values have continued to slide," said QV research director Jonno Ingerson.

Nelson and Christchurch are the only main centres to see increases, Nelson up 1.4% and Christchurch a modest 0.3% higher - largely as a result of the earthquake pushing up demand for property in undamaged areas.

"Auckland has been stable for several months and values are now only 0.6% below the same time last year. In the Wellington area values have been rising since October after declining steadily in the six months prior and are now 2.5% below last year. Christchurch is the only main centre where values are above the same time last year at 0.3% as demand for houses in areas undamaged by the earthquakes has lifted prices. The remaining main centres have generally declined over the past year and values in Hamilton are now 3.4% down on last year, Tauranga down 2.2%, and Dunedin down 3.7%," Ingerson said.

He said that sales activity slowed over the holiday period as usual and that "it is still too early to tell whether the property market in 2011 will be any different to 2010."

Auckland was the main centre that saw the smallest decline on last years values and prices have generally remained stable over recent months.

QV Auckland valuer Glenda Whitehead said, "Even though year-on-year values have been negative, there was relatively limited market movement in the Auckland region in the latter half of 2010."

"The low sales and listing volumes in December and January are of concern, but being a traditional holiday period at the end of a slow year, not overly surprising."

Whitehead said one trend in the Auckland region throughout 2010 was that quality homes in sought after areas continued to sell well while poorer presented property in fringe locations suffered.

She said plaster homes built in the 1990s and early 2000 had seen particular downward pressure on values.

In the capital values decreased by 2.5% in January compared to last year, however after a decline in values through 2010 they are recovering somewhat.

"Values in the Wellington region are showing positive signs," said QV Wellington valuer Kerry Buckeridge.

He said that while sales volumes have been lower than this time last year, "Across the Wellington region properties appear to be selling well provided they are priced appropriately. We are beginning to see multiple offers on good properties - a situation we have not seen for quite a while."

In Hamilton the QV Residential Price Index for January shows property values fell by 3.4% over the past year.

QV Hamilton valuer Richard Allen said the expected summer lift in sales volumes failed to materialise.

"At the moment the lack of demand is due to uncertainty in the economy and confidence in its recovery," he said.

Tauranga has seen values decrease by 2.2% over the past year, and QV Tauranga valuer Shayne Donovan-Grammer said the market has continued to soften.

"At this stage there are no indications that suggest the market will improve in the coming months," he said.

"Speculative property, namely apartments and sections which were developed during the economic heights a few years ago, are in oversupply and therefore experiencing the worst during the current downturn."

He said one trend he had noticed was both buyers and tenants migrating towards areas close to good schools.

"As the city grows it will become more of a factor in buyers' decision making in coming years," he said.

In Dunedin values fell 3.7%, continuing their downward trend over the past couple of months.

QV Dunedin valuer Tim Gibson said both values and sales had been falling across all suburbs apart from the central and northern city, where values remained steady.

"We have seen some optimism in the residential market for January with open home enquiries being strong. However, there has been a shortage of good quality homes listed in Dunedin," he said.

"This has seen values in the top-end of Dunedin's residential market steady in comparison to lower price brackets. This is one of the reasons why values in central and northern Dunedin are performing better than elsewhere."

He said QV statistics revealed sales volumes are 10% less over the whole city than the same time in 2010.

Christchurch was the only main centre to buck the lowering value trend, up 0.3% over the past year.

QV Christchurch valuer Melanie Swallow said that while values appear to be recovering since the September earthquake, the rise needed to be seen in context.

"An increase in demand for property in relatively unaffected suburbs has had a very small corresponding lift in sale prices, which is what we expected to see. Since the initial delay in activity as a result of the earthquake, we are now seeing more listings coming to market, more buyer enquiry and a clear increase in activity, particularly in the entry level sector."

She said that good quality homes were attracting strong interest but that lifestyle and holiday home sectors remained flat.

Across the rest of the country only Nelson saw values above last year, up 1.4%.

Values were below last year in Whangarei (-4.4%), Rotorua (-3.3%), Gisborne (-5.2%), Wanganui (-2.6%), Palmerston North (-3.3%), Queenstown Lakes (-3.3%), Invercargill (-3.8%), Hastings (-1.6%), New Plymouth (-1.5%) and Napier (-0.1%).


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