Property trend continues to slow

Matt Stewart
Although still in decline, decreases in Wairarapa property growth values are being hailed as part of a nationally stabilising trend according to new Quotable Value (QV) figures.
Masterton house prices improved slightly from -14 per cent in March to -12.3 in April, over the same period South Wairarapa slumped further from -8.2 per cent to -11.9 per cent while Tararua values also took a fall dropping from -5.3 per cent to -7.1 per cent.
Carterton's sales volume was again too low to gather any meaningful data while South Wairarapa's was also considered too low to create a picture of any real trend.
Masterton recorded an average April sale price of $244,945, with South Wairarapa on $269,136 and Tararua $164,898.
"It appears things are levelling off in Masterton and although South Wairarapa looks worse they have had so few sales that any one or two sales could negatively affect the figures," QV's Pieter Geill said.
"There seems to have been a lot of sales in Wairarapa in the past two months and the number of properties for sale has been declining, which could lead to an increase in value but it's all speculation.
Mr Geill said Wairarapa was reflecting what was going on in the wider Wellington region; over the past year the Wellington region decreased by 8.5 per cent (calculated over the three months ending April 2009 in comparison to the same period last year), a slight improvement on the 8.7 per cent annual decline reported in March. The average sale price for the region decreased slightly from $429,848 to $424,076. The Wellington region is down 9.4 per cent from its peak in February 2008, he said.
"There has definitely been some strong activity in the market lately, exemplified by a very recent flurry in April.
"Stocks seem low probably because summer listings have eventually cleared and some potential vendors have managed to refinance and take advantage of lower interest rates. On the face of it the market is displaying healthy demand with increased attendance at open homes with the good weather through April possibly contributing to this. Although activity is not currently having a positive impact on values, it will be interesting to see if a potential drop in supply will have any effect. The lack of new stock is characteristic coming into the winter months and time will tell if demand will outstrip supply. If we see unemployment spike to predicted levels supply may increase again significantly.
"There is a continuation of forced or pressed sales which may not always be obvious to the untrained eye. Some people are definitely feeling the pinch and are finding themselves in a position where they need to sell. Listings aren't always advertised as such, but we know they exist. There is still some good buying out there.
"Different strata in the market are behaving differently and a few investment-savvy people are taking advantage of this. Some believe it is a good time to upgrade, selling out of the more active lower-end of the market and buying in the comparatively subdued upper-end. If you can afford it there is some great buying in the $600,000+ bracket. This sentiment points to the possible movement of some upper-end properties, as long as vendors are willing to meet the market" Mr Geill said.
In the general market he said there were still investors "out there looking, but they're only going to pay bottom dollar."
The QV national residential property indices for April showed a 9.2 per cent decline in property values over the last year, a slight improvement on the 9.3 per cent decline reported last month. This is the first time the trend in property values has improved since September 2007.
According to QV Valuations spokesperson Blue Hancock this marginal improvement reflects a stabilisation of prices being paid over recent months. The QV statistics show that national property values peaked in January 2008, with current values now 9.6 per cent below that peak.
Nationally the average sale price declined from $378,399 in March to $372,981 in April, reflecting more sales at the lower end of the market.