New Zealand property prices slip

Country: New Zealand

12 November 2008

The average price of a residential property in New Zealand dipped by 1% in October, taking the average annual price decline to 6.8%, according to QV Valuations.

"Activity levels remain unusually low, especially considering that spring usually brings an upsurge in the number of house sales," said Blue Hancock of QV Valuations.

The average New Zealand property sale price for October remained steady at $379,290 (£141,983).

Both buyers and sellers have become cautious in light of the current financial crisis, dropping interest rates and a change of government, following last week’s election.

Across Auckland property activity remains unpredictable, with the mid to upper end of the market attracting more buyer attention than the lower end. Average values are down 7.7% year-on-year.

"At the lower end of the market, some first home buyers attracted by lower values are hamstrung by the need for a larger deposit due to the more stringent bank requirements," said Glenda Whitehead, Auckland manager of QV Valuations.

"On the other hand, established investors are making cheeky offers in an attempt to secure a good rental return," adds Whitehead.

Last week Barfoot & Thompson said the city's residential property market experienced its slowest October for at least a decade.

The agency recorded 503 sales in October, down from 796 in October last year. The average sale price increased from $495,873 (£185,615) in September to $520,039 (£194,661) in October but was down from $546,679 (£204,633) in October last year.

QV says values in Hamilton fell by 9% over the past year, down further from the 8.8% drop recorded in September, with the average sale price for the city declining to $349,253.

Average property values in Tauranga declined by 7.9% to $436,765.

In Christchurch properties experienced a 7.8% decline and Dunedin 8.2%. Queenstown Lakes decline was 8.1% and Invercargill 4.6%.

QV notes that property prices in Upper Hutt were rising annually by 19.8% a year ago and is now recording an annual decline of 7.2%.

Whangarei was down annually by 8.5%, Rotorua 9.4%, New Plymouth 8.1%, Gisborne was unchanged from last month at down 10.1%.

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