New Zealand: Property Slowdown Continues

March 11th, 2008 • Related • Filed Under


Quotable Value has released February’s figures for New Zealand’s housing market. The average sale price of a house in New Zealand has increased to $393,240 (£154,819) from January’s $390,636 (£153,794). Property values have increased 7.7% over the calander year. 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.

QV spokesperson Blue Hancock said:

“The property market is fairly subdued despite most areas in the country still experiencing good ‘year on year’ growth in property values, but the rate of this growth is slowing rapidly. Banks have lifted their mortgage rates, properties are staying on the market for longer, and the volume of sales is really dropping. There are less active buyers and sellers in the market, with those keen to sell having to accept lower offers.”

House Prices in New Zealand
Three Months Ending February 2008

Location Average House Price (NZ$) Average House Price (£) Comments
Auckland Region $518,085 £203,970 Property values in the Auckland region grew by 8.1% over the past year down from 9.6% reported last month. Of the main urban centres North Shore City experienced the largest drop in annual growth going from 11.1% to 8.3% despite recording the highest average sale price in the Auckland region of $598,131. Auckland City eased only 0.7% from 7.9% to 7.2%, with an average sale price of $589,265. Manukau City eased 2.1% to 9.2% annual growth, with an average sale price of $446,772. Waitakere City was down 1.3% to 9.4% annual growth, and has an average sale price of $406,327.
Hamilton $360,879 £142,078 Hamilton’s property values increased by 6.1% over the past year down from 8.3% reported last month. Declining sales volumes, a good supply of properties on the market, and the impact of increasing interest rates and decreasing immigration continue to put downward pressure on residential values in the city. For the first time in a number of years there is an over supply of residential properties on the market in Hamilton. The Central City/North West area of Hamilton decreased from 6.4 % in January to 4.5% in February, the South West decreased from 8.0% to 5.5%, Hamilton North East decreased from 10.0% to 6.6% and South East Hamilton decreased from 7.3% to 5.8%.
Wellington Region $457,530 £180,130 Property values in the Wellington region increased by 10% over the past year. Wellington City has dropped from a July 2007 high of 14.7% to 9.2% in February. The areas showing the weakest markets are Churton Park/Johnsonville, Kelburn/Northland, Karori, Brooklyn/Kingston. “Porirua City has dropped from a September 2007 high of 16.7% to 12.2% in February. It appears that this market is doing better than most with the weakest areas being Papakowhai, Whitby and Onepoto. All suburb areas are showing declining annual growth rates. The biggest change has been in Lower Hutt which has dropped from a September 2007 high of 20.4% to 9.9% in February 2008. The suburbs showing the most declines are Stokes Valley, Taita, Avalon, Western Hills, Petone and Wainuiomata. Upper Hutt also dropped from an August 2007 high of 21.5% to 13.4% in February 2008, with the Rimutaka area being the weakest market.
Christchurch $362,927 £142,885 The Property values in Christchurch increased by 6.1% over the past year, down from 6.9% reported last month. The belief that the housing market is slowing appears to have become entrenched, with the sixth consecutive month of decreasing annual growth rates. Annual growth rates continue to decline reflecting the recent downturn in the market. In the local areas the lowest annual growth rates recorded were 5.6% and 5.2% for Christchurch’s northern suburbs and hill suburbs respectively. Southern areas faired the best, with Ashburton recording growth of 11.0% and Timaru 13.0% growth compared to the same period last year.
Dunedin $280,121 £110,283 Dunedin’s residential property values increased by 5.3% over the past year. While the statistics do not show values are dropping, there is evidence of prices easing in some instances, particularly for properties that require some attention in the way of deferred maintenance, or those with design features that do not suit the wider market. These properties would generally sell well in a buoyant market, but under normal market conditions would attract a more significant discount.
Tauranga $425,007 £167,326 Property values in Tauranga increased by 2.9% over the past year. There is now widespread acceptance that the property market is quieter. Rising interest rates are helping to fuel uncertainty amongst both buyers and sellers. Lower than expected sale prices are now coming through with more regularity. There is an abundance of stock available with some categories and locations faring better than others. Valuers have commented that the apartment market, both in Mount Maunganui and Tauranga is performing poorly.

* Assumed exchange rate is £1 = NZ$2.54

Post a Response