Property values steadily increase then level out

Photo / Greg Bowker

Property values have levelled out in most parts of the country in the past few months, and the national average is up from last year, the latest QV index shows.

Results from the QV residential property indices released yesterday show the national average value has risen to $416,074 - up from $409,807 in January last year.

The results show property values across the country steadily increased over the period. But that was masking what has happened in the past few months, says QV valuations manager Glenda Whitehead.

Growth in urban and provincial areas had slowed, although the trend was more pronounced in urban areas. Houses in rural areas had decreasing only slightly in the past month.

"The market remains patchy and buyers cautious," she said.

"There is activity at the lower end of the market, driven mostly by first-home buyers.

"Fewer investors are actively buying and some are selling their investment properties now rather than waiting for the changes in property tax to be announced in the May Budget."

In Auckland, the annual growth in property values stood at 8.7 per cent last month - an improvement over the same time last year, when annual growth was 7.3 per cent.

The latest results show the average Auckland sale price is $548,948.

Property values in Wellington show a 6.7 per cent growth last month, up from 5.7 per cent last January.

The average sale price in Wellington was $468,698.

Other main urban areas had a 7.3 per cent growth - up from the previous year's 6.32 per cent - with an average sale price of $456,535.

Results show property values in other areas, including Gisborne, Napier, Palmerston North, Nelson and Rotorua, were varied but on the whole still higher than they were the same time last year.

Whitehead said that sales activity had picked up last month.

A significant increase in new properties being put on the market was expected to result in a higher sales number in the next few months.

Uncertainty after last year's economic recession was still having effects on what and when people were choosing to buy, but that uncertainty was expected to phase out.

"We expect values to stabilise, months, reflecting the ongoing uncertainty around economic factors such as employment, pending interest rate rises and continued tight lending criteria," Whitehead said.

"We may see more certainty in the market after the May Budget announcement, when personal tax cuts are known, changes to property taxation are specified and interest rate changes are clearer."

Property prices

Average sale price January 2010

* Auckland: $548,948

* Wellington: $468,698

* Christchurch: $380,925

* Hamilton: $361,394