Property market picks up steam in August

By NZPA

Monday 10th September 2007

Property values increased at a greater pace over the last year in an astounding show of strength, shrugging off expectations of a slowdown, QV said in its monthly report.

National property values rose 13.3% for the year ended August, picking up from a 12.7% increase in July, to the fastest rate of increase in 16 months.

That was despite rising interest rates, slowing migration, and a volatile currency, QV spokesman Blue Hancock said.

Ultimately, a fall in the number of buyers meant there was no downward pressure on prices, despite the smaller number of listings over winter.

The trend has quickened since QV put the rate of annual growth at 8.8% in January.

"The market refuses to lie down. The other astounding thing this time is the increase in the average sale price," Hancock said. The average property sale price rose to a record high $394,397 over the period, up from $381,298 in July.

"It's just that confidence with people having dollars in their pockets and jobs, and if the market's rising at this pace they've got to get in now if they can afford to pay that interest bill ..." he said.

The data in QV's monthly report is based on sales over the three months ended August, compared with a year ago.

The latest figures do not reflect the recent finance company collapses, which have dented market confidence and panicked investors into putting their money into other assets.

Among the main centres, Auckland's property values rose by 12% over the past year, up from 10.2% in July. Wellington was up 14.5% from 14.7%, Hamilton rose 14.1% from 13.6%, and Christchurch was up 14.1% from 13.4%.

Leading the country were Gisborne, steady at 25.3% growth, and Invercargill was up 34% from 30.9%.

Growth slowed in Dunedin to 9.6% from 10.8%.

While QV reports an average sale price, it bases its index on the sale price of each property sold compared with its capital value.

More housing data is expected in the next few weeks from the Real Estate Institute, which has shown a decline in the national median house price for two consecutive months after hitting a record of $350,000.

Also coming up is the Reserve Bank's decision on interest rates next Thursday, expected to be no change to the current 8.25% official cash rate.

Compare rental and house price statistics online today at www.Landlords.co.nz.

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