New Zealand House Price Fall Continues

For newcomers from the UK, houses in New Zealand have not been so well priced for some time. The average sale price of a house in New Zealand was $383,786 (£124,554) in February. Over the calander year, there has been a 8.9 percent drop in property prices.

Commenting on falling house prices in New Zealand, Quotable Value’s spokesperson Blue Hancock said:

“The current economic climate continues to impact the housing market, with job security a concern, and uncertainty over how the current global economic crisis will hit New Zealand. The renovation market remains mixed, with some home owners choosing to renovate rather than sell, while others are delaying planned renovations until economic conditions improve. Our expectations are that sales volumes will remain relatively low for the rest of this year, with values continuing to ease back marginally”

House Prices in New Zealand
Three Months Ending February 2009

Location	Average House Price (NZ$)	Comments
Auckland Region	$502,193 (£184,630)	Property values in the Auckland region fell by 9.4% over the past year. Buyer interest appears to have increased in most areas. There has been renewed buyer interest in areas such as Ponsonby, Grey Lynn and Mt Albert, with reports of quality homes in these areas receiving multiple offers or competitive bidding at auctions. Prices achieved are at a better level than those seen last year.
Hamilton	$334,068 (£122,819)	Hamilton’s property values decreased by 10.1% over the past year a slight decline on the 10.0% fall last month. As interest rates are likely to continue to fall, there is some anecdotal evidence to suggest that investors are starting to re-enter the market as residential yields improve. However, sale volumes remain low. This lack of demand, the economic recession and questions over job security means that the residential property market in Hamilton is likely to remain relatively subdued for the rest of 2009.
Wellington Region	$433,339 (£159,316)	Wellington’s property values decreased by 9.3% over the past year. Despite some signs of increased interest, this is not yet translating into significant sales volume. Sales in Wellington typically involve parties who are especially cautious. Guarded bankers and wary buyers are stretching out proceedings, with most contracts inheriting an extensive list of conditions. The property market will need a considerable lift in sales-volume before any price recovery can commence. We don’t expect to see such a lift any time soon, given domestic job-security issues and the international economic situation.
Christchurch	$344,816 (£126,771)	Property values in Christchurch decreased by 9.1% over the past year. Property values since November 2008 continue to decline. The average sale price also continues to show a decline, although this could be influenced by a low sales volume over the months of January and February. Local banks have reported an increase in pre-approvals, which is consistent with agents reporting an increase in inquiries. This activity is yet to trickle through into the sales however.
Dunedin	$258,212 (£94,931)	Dunedin’s residential property values decreased 9.4% over the past year. The Southern City and the Taieri areas have shown the greatest year-on-year decline (-11.2% and -11.5% respectively). This is in contrast to the Peninsula/Coastal and Central Northern areas, which have declined by 6.7% and 7.6% respectively year on year. So all property values across the city are still declining, but some areas are declining faster than others
Tauranga	$421,151 (£154,835)	Property values in Tauranga decreased by 8.4% over the past year. Although decreasing interest rates seem to be raising the level of general activity in the market place, this is yet to convert into sales. Vendors are still grimly holding on to what they think their property is worth, while buyers are insistent on buying at heavily discounted prices.

* Assumed exchange rate is £1 = NZ$2.72
** New Zealand’s average house prices are not directly comparable with the UK’s because, unlike the UK, the average home in New Zealand is a detached bungalow.