QV price index bounces back

New Zealand property prices have rebounded sharply in most areas following a twelve month downturn, according to the latest statistics from QV Valuations.

In the six months to June, the QV House Price Index rose 2.7 per cent, following a 3.7 per cent decrease over the previous six months.

The number of freehold open market house sales during the period increased by just over 34 per cent to 35,615, reversing the trend of three successive falls in sales since the June 1997 half year.

The greatest rises in the Price Index came in the Wellington region. Porirua led the field with a rise of 8.6 per cent, followed by Upper Hutt, up 6.1 per cent, then Lower Hutt and Wellington City both with rises of 4.3 per cent over the previous six months.

The Auckland City index rose 3.4 per cent while among the centres to register falls in the QV House Price Index were Papakura (-0.8 per cent), Invercargill (-0.8 per cent) and Rotorua (- 1.1 per cent).

The highest freehold open market average sale price (including chattels) was in Auckland City ($336,000) followed by North Shore City ($313,500) and Wellington City ($258, 500). The increase in the numbers of sales was spread evenly across all price bands.

QV’s spokesperson, Nigel Jeffries, said that the rise in the index was in line with QV’s predictions and marked a return in confidence in the economy and the property market.

“It’s pleasing to see factual confirmation of the recovery in the property market after the downturn of the past 18 months. However, I think it is fair to say that in some areas, particularly Auckland, the market had been in need of a correction,” Mr Jeffries said.

“The Auckland region is still well ahead of the rest of the country in terms of QV Price Index although the significant rises in Wellington mean that the gap has narrowed slightly.

“It is also interesting to note that just about every region has experienced a rise or, at worst, only a small decrease in the price index. This demonstrates a definite return of confidence in the overall property market.”

Other trends over the six months to June were a dramatic increase in the numbers of sales of ownership flats to 8149 (up 35.8 per cent from the previous six months) and an even greater rise in the number of sections sold (up 118.6 per cent to 4818).

Both commercial and industrial properties showed increases in the number of sales reported with commercial sales up from 25 to 42 and industrial up from 142 to 184. However the QV Commercial Price index in both categories fell slightly.

In the rural sector, most types of property also showed a rise in the QV Rural Price Index in the six months to June. Overall, there was an 0.9 per cent rise in the index as well as a 0.9 per cent rise in the total number of rural sales.

Grazing land showed a rise of nearly 9 per cent over the previous six months with fattening land and horticultural land both rising 5.8 per cent. The only categories to show a fall in the index were arable land (-1.7 per cent) and dairy land (-3.4 per cent).

Nigel Jeffries said that the next six months would be an extremely interesting period for property sales and the December figures would confirm whether the market had truly recovered.

“Over the next six months, I would expect to see the trends displayed over the past six months to continue, with sales volumes and the QV Price Index both continuing to rise.”

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