NZ property values up but outlook cloudy in 2012 - QV

Photo / Greg Bowker

New Zealand property values extended gains in December, though government valuer Quotable Value says the outlook is a mixed bag for 2012.

National property values rose 2.4 per cent at the end of 2011 from a year earlier and are 3.5 per cent below the peak in late 2007, QV said in a report. Values in Auckland were 4.3 per cent better than a year earlier, and underpinned the nationwide gains as a lack of new listings and good housing for sale stoking demand for quality properties.

"Despite national values moving upwards during the year, the property market continued to be characterised by lower-than-normal sales volumes," research director Jonno Ingerson said. "First home buyers came back into the market in 2011, encouraged by low interest rates, while investors were largely on the sidelines."

The property market spent much of last year in decline as households used record low interest rates to focus on repaying debt rather than take out a new mortgage, keeping a damp on the number of properties sold and encouraging owners to hold off selling.

Ingerson said the outlook for 2012 is mixed. Auckland will probably see values further increase amid a growing population, weak building activity and limited new listings.

Christchurch values will depend on the timing of the city's rebuild and whether there are any more earthquakes, while Hamilton and Tauranga values are expected to be stable.

"The property markets in the provincial and rural areas are heavily dependent on the strength of the local economies in those areas," Ingerson said.

"A strong rural sector typically has a positive impact on the property values in towns supporting those areas, likewise the coming or going of large local industries can have a significant impact."

Auckland's average sale price in the three months ended December 31 rose to $597,032 from $513,792 in November.

Wellington area property values were 0.4 per cent lower than in December last year, slowing the decline through the first half of 2011. The average three-month sale price of $483,160 rose from $421,778a month earlier.

Christchurch property values were 4.3 per cent above the same month a year ago, with the average sale price at $371,885, down from $372,040, and Dunedin property values were 1.6 per cent higher than in 2010, with the average sale price at $265,210 in December, up from $257,951 in November.