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Further signs property values easing

Monday 12th May 2008

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National residential property values have grown 4.9% over the past year, down from the 6.5% growth reported in March, according to the latest Quotable Value statistics for April.

The average New Zealand sale price remained steady at $388,465, according to the April report.

"Although the change in property values over the past 12 months is still positive at 4.9%, it's interesting to look deeper into the figures," says QV spokesperson Blue Hancock. "Most of this growth occurred in autumn last year, while values remained pretty flat through the second half of 2007. Over the first three months of 2008 we are beginning to see property values easing back over most areas of New Zealand. With property listings still high, buyer demand reducing and the typical slowdown through winter, we would expect this trend to continue and our monthly statistics will likely show declining values in the coming months."

After such a sustained period of growth seen across the property market, a correction was inevitable, says Hancock, "and we're definitely seeing that happening."

How long buyers stay out of the market will determine the size of the correction. "If immigration stays positive, rents start to increase and investors begin to see bargains then demand may turn around again," says Hancock.

Annual growth rates continue to slow in most of the main urban centres. Auckland City's growth rate eased the fastest, "from 6.2% reported last month to 3.2%. Hamilton (2.3%) and Christchurch (4.6%) both dropped back just over 1%. Wellington City's annual growth remains the highest amongst the main centres at 5.3% despite a 2.1% drop from last month. Tauranga's annual growth remained relatively steady at 3.5%, while Dunedin is the first of the main centres to show a decline in annual growth at -0.1% compared to the same period last year.

Most of the main provincial centres also showed slowing annual growth rates. Gisborne (1.1%), New Plymouth (0.5%), Wanganui (1.7%), Palmerston North (1.8%) and Nelson (3%) are now all showing property values only slightly higher than the same time last year. Rotorua was stable at 5.8%, while Napier and Hastings both increased slightly from last month to 4.1%. Queenstown again showed an increase from the previous month, now climbing to an annual growth rate to 7.4%. Despite a further decline this month, Invercargill still has the highest annual increase of any area in NZ at 19.1%.

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