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NZ property values in a lull as investors wait on Budget: QV

Monday 10th May 2010

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New Zealand property values rose 6.1% in the 12 months through April as investors wait for clarity on the tax treatment of investment properties in the Budget, according to state-owned property valuer QV.

The average sales price for the three months ended April 30 fell to $405,235 from $407,133 as the property market remained “relatively subdued,” and the increase in value will fall as the gap between this year’s and last year’s value closes, QV said. Values were 3.9% below the market peak in late 2007. 

“The property market remains relatively subdued as both buyers and sellers carefully consider their positions,” Whitehead said in a statement.

“There is little urgency, and many people are waiting to see the exact nature of the changes in the May budget before deciding their next move.”  

Auckland house sales slumped 28% last month with the average sales price down 1%, according to Barfoot & Thompson, the city’s biggest real estate firm.

The pick-up in the housing market has been tempered by caution with the number of mortgage approvals sinking 7.4% in the 12 months ended April, compared to the same period a year earlier, according to central bank data.  

Whitehead said the property market was “very mixed” with some areas showing good growth, while others reported falling values.  “Activity over the coming months will in part be dependent on how people react to changes in the Budget,” she said.  

The government has flagged tax on property investment as an area that it wants to address, with cutting investors’ ability to claim depreciation on buildings the most widely expected announcement. 

In Auckland, property values increased 9.5% in a rolling three-month period ending April 30 from a 9.9% gain in March, while the average sale price dropped to $532,538 from $546,052.  

In Wellington, values increased by 7.1% in the rolling three month period, from a 6.6% gain reported in March. The average sale price rose to $460,365 from $458,260.  

Christchurch property values rose 6.9%, from the previous month’s 6.9% gain, with the average sale price down to $367,688 from $374,117.

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