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13-09-2011

QV August 2011 – the regions

Landlords.co.nz

A lack of quality listings is helping push values up in Auckland, while Wellington remains in a “holding pattern” according to the QV Index for August.

Auckland

QV's Residential Price Index for August shows that property values in the Auckland region are 2.2% higher than the same time last year. Values are continuing to increase.

Glenda Whitehead of QV Valuation said; "The quick summary of the Auckland region - there are a lack of quality listings. When properties are placed on the market they are selling quickly and for a good price. In many cases it's toward the upper end of the value range for that area or type of property. There is a hint of more properties being listed as we come into spring, and if this comes to fruition it may address what looks like a temporary supply/demand imbalance."

"Central Auckland continues to perform strongly. Quality and character properties in popular inner city locations are selling well and in some instances above expectation at auction. While there is the odd example of extreme sale prices, many sit within established value ranges" Whitehead said.

Whitehead said "we have seen spiky sale prices in the popular school zones or traditional areas where demand continues to be high and supply low. While agents have indicated people are prepping their properties to put on the market, only time will tell if we see a change in the supply and demand balance being experienced right now."

"In West Auckland, popular suburbs of Te Atatu, New Lynn, Green Bay and Titirangi are achieving good sale prices. Agents are reporting steady buyer activity, but indicating there is a lack of quality properties available. Home-and-income properties remain sought after from both owner occupiers and investors. We are seeing many properties going to auction, as current owners look to benefit from the increased interest. Vacant infill sites are now starting to sell, with many purchasers intending to build in the short term."

Whitehead said "on the North Shore values are increasing slightly in a number of suburbs after low winter listing levels. Again this is driven by the quality listings. Properties with issues or poorer presentation are slower to sell, and at levels reflective of their attributes. Listing levels appear to now be rising, which is a typical spring trend."

"In the South East there also continues to be a lack of quality properties available. A large number of the listed homes tend to be plaster homes, which buyers (and lenders) are very cautious of. For these types of properties we see extended selling periods and they don't tend to hold their value like homes constructed with more trusted materials. They do however represent a viable option for some trying to get into an area they might otherwise not be able to afford, but obviously with some risks" she said.

"Those well presented homes in good localities that are reasonably priced are achieving good sale prices and are selling within short periods of time. Many owners with these types of properties are choosing to sell by auction."

"In the investor areas, investors remain cautious and agents advise that many are only interested in properties which are showing positive cash flows" Whitehead said.

QV's Residential Price Index is calculated using sales data from the three months leading up to the month being reported. It is not the same as the average sales price, which fluctuates in line with the mix of properties selling in upper or lower price brackets. The average sales price for the Auckland region in August was $532,296.

Wellington

QV's Residential Price Index for August shows that property values in the Wellington region are 2.4% lower than the same time last year.Values in the region continue to decrease.

Pieter Geill of QV Valuations said; "Wellington is in a holding pattern. Despite some agents doing very well, the region is still slow with low sales volumes and cautious buyers."

"It appears that previous declining values are leveling off. This however needs to be taken into context with the continuing public sector restructuring and now, the start of the Rugby World Cup - will you be able to get your good Kiwi bloke to an open home in the next six weeks? The market could slow down in a manner similar to what happens during some school holidays" Geill said.

"Agents still report a shortage of good listings and unrequited buyers who can't find the right property and are reluctant to put pen to paper.Anecdotally, investors are back, but only the cheeky ones trying to steal bargains."

QV's Residential Price Index is calculated using sales data from the three months leading up to the month being reported. It is not the same as the average sales price, which fluctuates in line with the mix of properties selling in upper or lower price brackets. The average sales price for Wellington in August was $438,016.

Hamilton

QV's Residential Price Index for August shows that property values in Hamilton are 1.8% lower than the same time last year. Values in the region continue to be flat.

Richard Allen of QV Valuations said: "Values in Hamilton City continue to fluctuate in a very narrow band. This means that the residential market in the city appears to have completely levelled off."

"We have started seeing some positive signs in the market, perhaps an indication that the spring season has started a little earlier. Hamilton City, Central City, North West, South West Hamilton, North East and South East Hamilton have or look to be moving a positive direction" he said.

QV's Residential Price Index is calculated using sales data from the three months leading up to the month being reported. It is not the same as the average sales price, which fluctuates in line with the mix of properties selling in upper or lower price brackets. The average sales price for Hamilton in August was $339,335.

Tauranga

QV's Residential Price Index for August shows that property values in Tauranga are 0.5% lower than the same time last year. Values remain fairly steady.

Shayne Donovan-Grammer of QV Valuations said; "The Tauranga market has not seen any significant changes for a few months now. As is the case every year, we expect to see a gradual increase in activity from now until the end of year."

"A lot of potential sellers who purchased properties in the last five years have come to the realisation they may not receive an offer price the same or greater than when they purchased. This means they are in a holding and waiting pattern to see what the market does" he said.

"Buyers aren't in a hurry either as they perceive the market isn't going to 'get away from them' any time soon. They are also being much more thorough before committing themselves as the market conditions allow them to be."

QV's Residential Price Index is calculated using sales data from the three months leading up to the month being reported. It is not the same as the average sales price, which fluctuates in line with the mix of properties selling in upper or lower price brackets. The average sales price for Tauranga in August was $427,414.

Christchurch

QV's Residential Price Index for August shows that property values in Christchurch are 1.7% higher than the same time last year. Values continue to increase, driven by activity in the unaffected areas.

Brendon Bodger of QV Valuations said; "There is definitely an increased demand for property in the relatively unaffected suburbs of Christchurch. The market is gaining traction, particularly at the entry level. Values continue to show some recovery."

"Attendance at open homes and enquiries for vacant residential sections is strong.  With interest for well priced, quality homes in the North West and South West suburbs as well as the main Selwyn and Waimakariri townships" Bodger said.

"Sale prices continue to hold, even in the eastern suburbs. Agents are reporting multi offer situations. A number of sales have occurred in the white zone (which means the area requires further geotechnical investigation), with purchasers mitigating their risk by not paying over Capital Value in case the property is re-zoned red. There has also been activity for quality lifestyle properties in the million dollar plus range which is very encouraging."

"This increase in market activity, particularly buyer enquiry, is being driven from those in red zone areas. They are evaluating their options as their government letters of offer arrive in the post. We are aware of a number of property owners who have already accepted the offer and have purchased property elsewhere in Christchurch" Bodger said.

QV's Residential Price Index is calculated using sales data from the three months leading up to the month being reported. It is not the same as the average sales price, which fluctuates in line with the mix of properties selling in upper or lower price brackets. The average sales price for Christchurch in August was $378,738.

Dunedin

QV's Residential Price Index for August shows that property values in Dunedin are 2.9% lower than the same time last year.Values continue to be volatile but are generally decreasing.

Tim Gibson of QV Valuations said; "the Dunedin residential market has seen another slow month with values falling slightly. It is not isolated to Dunedin; provincial Otago is also experiencing similar market conditions."

"We have seen longer selling periods, a reluctance for potential purchasers to commit and patchy interest for properties.  The two snow storms in August may have contributed a small amount towards this" he said.

"A positive is that the entry level market is performing reasonably well. There have been increased sales when compared to the corresponding time last year. As values have reduced over the past six months and a sense that interest rates might increase soon, it is seen as an ideal time to purchase that first home or even a rental investment. To date there has been no increase in values in the lower end market as a result of this increased activity."

"Real Estate firms are reporting an influx in listings due to the arrival of spring. This is likely to give prospective buyers more choice in the market. It may also result in decreased selling timeframes and possibly some value growth."

QV's Residential Price Index is calculated using sales data from the three months leading up to the month being reported. It is not the same as the average sales price, which fluctuates in line with the mix of properties selling in upper or lower price brackets. The average sales price for Dunedin in August was $268,675.

Source: Landlords.co.nz

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