New Zealand property values fell 7.4 per cent during 2008 - the first sustained drop since 1998, says a new report.
QV Valuations has just published its latest Residential Price Movement report, a well respected measure of the change in New Zealand property values.
"Property values held reasonably flat through the first three months of the year, but the decline kicked in through the autumn and winter months, during which time values dropped 6 per cent," said Quotable Value's Mark Dow.
"With the significant drops in interest rates over the past three months, there has been an increase in market activity and values appear to be flattening again."
Property values grew by 120 per cent between 2002 and 2007, said Dow. The last period of sustained growth happened between late 1992 and 1997 - when values went up by 54 per cent.
"After such a period of sustained growth it's inevitable that we will see a correction. The question remains how long this period of falling property values will continue," said Dow.
During 2008, the number of house sales fell dramatically and the proportion of lower value properties selling also significantly decreased.
"This pattern reflects the wider drivers of the property cycle," said Dow. "When the economy is strong; job prospects are good and immigration is increasing, then demand for houses, particularly first homes, pushes prices up.
As the economy weakens and affordability becomes a real issue, first home buyers are usually the first to suffer; sales volumes drop and activity in the market moves back to mid to higher end properties as we saw through 2008," he said.
The 7.4 per cent decline for the year was calculated by QV by comparing the three months ending December 2008 with the same period last year. The Average sale price for December increased slightly to $378, 605.
All the main centres have shown a fall in property values, says QV. In the Auckland area, there was a fall of 8 per cent; Hamilton was down 9.3 per cent, Wellington 6.9 per cent, while Christchurch fell 8 per cent and Dunedin 7.7 per cent.
Across the nation:
- Whangarei: Down 8.6 per cent
- Auckland: Down 8 per cent
- Hamilton: Down 9.3 per cent
- Tauranga: Down 9 per cent
- Wellington: Down 6.9 per cent
- Christchurch: Down 8 per cent
- Dunedin: Down 7.7 per cent
- Invercargill: Down 9.1 per cent
(Source HERALD ONLINE)
