Signs good for real estate recovery: institute

The long, slow slide in property values could be coming to an end, says Wanganui-Manawatu Real Estate Institute spokesman Ross Watson.
Although the latest statistics from Quotable Value (QV) showing that property prices, nationally, were down 9.2 per cent on this time last year, the figures hinted that the slump in the property market could be close to bottoming out, he said. The previous monthly figures put the price drop at 9.3 per cent.
Mr Watson said property price statistics could be read in different ways, but the reality was that investors were "coming out to play", and that was the best sign that the market was stabilising.
"That's something we have not seen for quite some time," he said.
Mr Watson said investors now entering the property market were "prudent and switched-on" and saw property as a sound investment that would yield a better return (7-10 per cent from rental properties) than present bank interest rates.
The majority of those now entering the property market were looking for a long-term investment also targeting capital gain while earning an income from rental properties.
"So what they are saying is they believe the market is bottoming out," Mr Watson said.
The other driver for the new wave of property investors was the number of "good products" on the market - not just for investors but also for first home buyers.
There were plenty of "serious sellers" in the market as vendors continued to lower their expectations to meet buyer expectations.
Mr Watson said sellers were having to accept lower prices, but they were buying in a low market so stood to gain when the market did start to improve ". . . and the reality is that if they bought in a high market, the property was probably too dear to start with," he said.
Despite the note of optimism sounded by the latest QV statistics, there was still a long way to go before there was any significant improvement in the property market.
"We are still very much in the correction period and that will continue for the next six to eight months. But it could be another two years before the market goes into a revival of some sort," Mr Watson said.
QV spokesman Blue Hancock said the slight improvement in the figures was the first such change since September 2007 so were a sign that property prices were finally stabilising.
"However, more data is needed to determine whether the property market has bottomed out," he said.