NZ property values turn negative in December: QV

by Paul McBeth

Jan. 13 (BusinessDesk) – New Zealand property values extended their decline in December for a ninth month, with the outlook still subdued for 2011, according to government valuer Quotable Value Ltd.

Average property values in December were 0.9% lower than the same month a year earlier, across the country, although prices rose slightly in Auckland.

The result is the first negative report since October 2009, and values are now 5.8% below the market peak in late 2007.

Between March and December last year, values dropped 1.9%, and the outlook for 2011 isn’t optimistic, QV says.

The average sale price rose to $410,058 in a rolling three-month period through December, up from $399,055 a month earlier.

“Without significant changes in the wider economy, indications at this stage are that there are unlikely to be any dramatic changes in the property market during 2011,” said Jonno Ingerson, research director at QV.co.nz.

“At some stage in the next year or two, the lack of building activity over the last couple of years, combined with a steadily increasing population is likely to lead to increased demand for housing, and therefore a stabilisation and subsequent increase in values.”

New Zealand’s property market fell into a slump last year as households focused on repaying debt amid historically low interest rates.

The record low volumes of property sales have kept new construction in a rut, with building consents falling to their lowest level of issuance since June 2008 in November.

Ingersson said more people are looking to sell over the coming 12 months, and there are “signs that the oversupply of property for sale may continue for the first half of this year.”

Property values in Auckland were up 1.2% in the three months through December, down from a 2.9% gain in the November period. Wellington values reported a 2.9% fall, more than the 2.1% in the November period, while Dunedin reported a 2% gain, turning around a 2.8% decline.

Christchurch wasn’t included due to the lack of activity in the wake of the September earthquake.

(BusinessDesk) 13:31:19