The latest property value index report from QV shows that in the past year the value of property sold has fallen by 9.2%, a slight improvement from the March figure which was 9.3%. This measure utilises QV’s valuation model to calculate the relative value of property sold in the past 3 months to the prior year period.
In addition QV also reported that the average price of property sales in the past 3 months was $372,981. Both of these metrics are detailed in the graph below showing the market as reported by QV over the past 2 years. 
Whilst this data and the trend in the graph seem to point to a slowing rate of decline it would be premature to call the bottom, for as can be seen from the graph of the black line representing the valuation index a bottom could potentially have been called in November last year when between October and November the index stayed at -6.8%; before continuing a decline for the next 4 months. As economists often say for a trend to be validated really needs 3 consecutive consistent data points.
The average price (3 month moving average) at $372,981 represents a 8.2% decline from the peak of October 2007 – some 18 months ago, when the average price reached $406,176, representing a monthly fall in price of $1,845.
The commentary from QV also reported the lack of new listings as a factor affecting the current market – this reinorces the view reported in the NZ Property Report from a week ago showing nationally listings were down 34% from a year ago
Alastair,
Many thanks for the link. You make a great point about it being too early to call the bottom. Great chart.
Here’s my 10 reasons why it’s too early to call the bottom over on my NZHerald blog
http://blogs.nzherald.co.nz/blog/show-me-money/2009/5/10/double-digit-price-rises-are-long-gone/?c_id=3&objectid=10571370
cheers
Bernard
Bernard – more than happy to link as at that time of the morning, I found that QV had not updated their website ! – it has been updated now – their view of the market is here.
Alistair,
Nice article. But of course it is misleading. I’m not blaming you, you’re publishing the data. The reason I think it is misleading is that it ignores the prevailing ‘inflation’ rate.
Now I have reason to believe that the official CPI differs greatly from the real CPI, both in the US and here in NZ.
To get a real picture of wealth rather than just prices one must inflation adjust the chart. If you believe the official CPI figures then the picture is not so different. But, if like me, you think the real CPI is much higher, then the fall in prices in only part of the picture.
Put simply, if real ‘inflation’ is 7% and house prices have fallen 9%, the real wealth loss is 16% in that year. This is the danger of the hidden “inflating our way out of debt” plan currently under-way.
I have published a fairly full explanation with charts here:
NZ House Prices versus CPI and Real CPI
http://neuralnetwriter.cylo42.com/node/340
A look at the bottom chart makes my point well.
Steve
Steve
A very valid point and one that has been made in the past as prices of property through the 80’s for example was fairly static – but judged against inflation actually lost value.
I guess there comes a point of analysis / paralysis, that is not to criticise your calculations, but people generally do not evaluate in inflation adjusted terms but think about the short term – are prices higher than a year ago and will they be higher in the future or will they be lower.
Alistair,
I quite agree. Some think the general lack of understanding/interest enables those who do understand to take advantage.
IMO that is regrettable. I think it makes it too easy for those in power to mislead.