Christhchurch Property Trends
Property values in Christchurch declined by 8.1% over the past year (calculated over the three months ending May 2009 in comparison to the same period last year), an improvement on the 9.6% annual decline reported in April. The average sale price for the city decreased slightly from $342,929 to $339,695.
These annual numbers need to be treated with caution, as the same period last year was a time of decline, measured against the month ending May 2009 which shows a period of flattening. So by default the numbers will show a recovery. It is a positive sign as far as market sentiment goes, but it is still too early to tell whether this 3-month stabilisation is the start of an extended levelling-off period. The small decrease in the average sale price is easily skewed by the mix of property being sold, so although this has limited value, it does reinforce a flattening in the market.
Suburban Christchurch has held well, with the central, northern, eastern and hill suburbs all showing an ease in the rate of annual decline. The central and northern suburbs are showing the largest recovery of 2.7 per cent” Mrs. Swallow said.
Mrs. Swallow of QV says “Anecdotal evidence from different market segments suggests the level of activity to be strong under $350,000, which typically represents the entry-level and investor part of the market. This is followed closely by the $350,000 to $600,000 market segment, which generally represents the next step up the property ladder for most people. The market segment of properties priced over $600,000 appears to have the least amount of activity. Again, this needs to be kept in context as it represents a much smaller part of the market overall. Properties over $1,000,000 are very slow to sell in Canterbury at present”
It seems as though job security is still the key driver behind purchase decisions at present. This lack of security, coupled with the normal seasonal variation, means we expect to see a continuing pattern of consolidation over the winter period
Property values continue to stabilise
The QV national residential property indices for May showed an 8.1 per cent decline in property values over the last year, a considerable improvement on the 9.2 per cent decline reported last month. This is the second month in a row where the year on year change has improved.
This improvement is due to continued stabilisation of property values in recent months, and contrasts significantly to a market that was declining sharply twelve months ago.
This latest trend as I pointed out in my last blog post is unlikely to continue. So if you need to sell, sell now!
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 Auckland Region |
| -7.6% |
| $483,397 |
| Hamilton |
| -7.5% |
| $346,274 |
| New Plymouth |
| -5.4% |
| $319,073 |
| Palmerston Nth |
| -8.9% |
| $274,418 |
| Christchurch |
| -8.1% |
| $339,695 |
| Queenstown |
| -8.4% |
| $600,414 |
| Invercargill |
| -10.3% |
| $205,552 |
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| Whangarei |
| -12.8% |
| $327,073 |
| Tauranga |
| -9.4% |
| $425,621 |
| Rotorua |
| -9.5% |
| $267,342 |
| Napier |
| -8.9% |
| $311,373 |
| Hastings |
| -9.7% |
| $295,508 |
| Wellington Rgn |
| -7.4% |
| $424,411 |
| Nelson |
| -6.7% |
| $333,812 |
| Dunedin |
| -5.4% |
| $264,180 |
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| New Zealand |
| -8.1% |
| $371,555 |
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Annual Property Value Change
Average Sales Price |
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source QV
What is the Market Doing Now?
The last property slump was in the early 90’s and in that time New Zealand experienced a mass exodus with immigration figures at one stage peaking at close to 40,000 (decrease) in a 12 month period. This created a surplus of housing and resulted in subdued sales and lower prices. At least through this recession migration figures have stayed in the positive. The lowest point was in February 2008 recording a net increase of 4600 over a 12 month period. Figures from Statistics NZ show seasonally adjusted net migration rose to 2,030 in April from 1,690 in March and is running at 9200 over the past 12 months. So with net migration figures in the positive, and still growing, it will only be a matter of time before this influx creates buyer demand and turns the property market from a “buyers” market to a “sellers” market.
Interest Rates – They are on the move so be prepared to act fast.
Longer term interest rates are still continuing to rise. This is a bit of a concern and disappointing for those who like to lock in long term. However the short term rates are very attractive and offer some significant savings. I wouldn’t expect to see any significant reduction in long term rates as the market is pricing in at the higher levels now. With the enormous amount of “money printing” by Governments around the world the next problem will be inflation. And that means higher interest rates. So fixing at 7.5% now may actually seem cheap in 2 or 3 years time as interest rates may escalate. Clients who have fixed for 4 or 5 years over the past 6 months will be on a winner if this eventuates. Whether you fix short or long will depend on your situation and strategy so don’t hesitate to call if you want some advice in regards to your situation.
Current interest rates
6month 5.45
1yr 5.50
2yr 6.25
3yr 6.99
4yr 7.50
5yr 7.99
June 11 2009 | The Market | 4 Comments »
Christchurch
This is the latest Press Release from QV.
Property values in Christchurch decreased by 9.7% over the last year (calculated over the three months ending March 2009 in comparison to the same period last year), deteriorating further from the 9.1% annual decline reported in February. The average sale price for the city increased slightly from $344,816 to $349,442.
Melanie Holcroft of QV Valuations said; “The Central and Northern suburbs are holding as the strongest areas of Christchurch City, with the Eastern suburbs mirroring the Canterbury market. The Hill suburbs have decreased from -8.1% in February 2009 to -9.9% in March 2009. The upper end of the market seems to be experiencing less activity compared to the middle and lower sections”.
“Property values since December 2008 continue to decline, although this appears to be at a slowing rate. Whilst the average sale price for Christchurch City shows a small lift, it must be kept in context as this data is easily skewed by normal market fluctuations and the mix of property being sold,” she said.
“The anecdotal signs of increased market activity with properties that are well priced continue on from last month, and buyers are showing plenty of interest in these. It should be noted however that the overall sentiment is still cautionary, with job security appearing to be the key driver affecting purchasing decisions. Local banks are also reporting a noticeable increase in pre-approvals, but this is still slow to filter through into market activity. We anticipate a slower market over the winter months, with current trends in line with seasonal behaviour,”Holcroft said.
Here is a snap shot of New Zealands Median Price for Property over the past 9 years.
Now here is the median for the same 9 year period in Christchurch.
The trend is very much the same.
Now the big change that agents have noticed is the drop in sales volume. Here is a graph from treasury that shows the drop in sales volume over the last two years and how it has changed.
As you can see there is a huge drop of with sales volume at about the time of the housing crisis in The United States which has evolved to the global credit crunch. But on the other side of this look at how steep the sales volume grew. This is post the 9/11 Twin Tower events which saw the number of migration of ex pats and new people to New Zealand grow at very fast rates as the graph below shows.
Now whether 9/11 was hoaxed by the Illuminati in a bid to change the world and protect certain people wealth or it was a real act of terrorism are still up for debate but the after effects have been more than anyone can detest. The jobs and employment from the upbeating of security was massive and in New Zealand the return home of thousands of New Zealanders pumped billions into the economy. But this caused the bubble that just kept getting bigger and bigger and created more and more debt. This debt is the real reason for the market the way it is. Now we have inflated prices with less capital and the same amount of debt.
When will the housing market start to move again.
Signs are already of more activity and there is a clear sign of migration numbers increasing as more people return home. These people have to live somewhere.
April 25 2009 | Buyers and Sellers and The Market | 1 Comment »
This is an update from QV for the month of January.
From where I was on the ground there seemed to be alot of positives and enthusiasm as the interest rates have come back to record lows and this coupled by the drop in prices making housing affordability more realistic than it has been for many years. Although with the tightened up criteria the banks have been excersing it is making it hard for investors and first home buyers to stay or enter into the market. The fact of the matter is that prices are expected to drop further, sales volume isnt expected to rise by much but interest rates will drop further as the RBNZ tries to stimulate the markets. But there still is very much alot of uncertainty within the market. There are some that see that there are opportunities out there to make positive cashflow out of investments where others think that the market still has to much recovery to go before it will be viable to make any commitments.
My opinion is that prices will continue to fall for most of this year. I feel the mortgagee market is going fuel this downward spiral into proabably the third quarter. This doesnt mean that opportunities are out there because they are and are waiting for any one of us to snap up, and generally they are pretty quickly. If you want some more reason to think why property prices may drop have a look at the housing affordability post on here. As with any market or situation its what you make of it. Here is what the official word is from QV..
Christhchurch Property Trends
Property values in Christchurch decreased by 8.8% over the last year (calculated over the three months ending January 2009 in comparison to the same period last year), deteriorating further from the 8.0% annual decline reported in December 2008. The average sale price for the city decreased slightly from $348,953 to $347,157.
Melanie Holcroft of QV Valuations said; “The change in property values experienced between October and December 2008 showed that the rapid decline could be easing, but these latest figures show that the situation is still worsening. Average sales prices continue to decline; this could be influenced by low sales volumes and the mix of property being sold.”
“There have been anecdotal signs of an increase in investor activity, driven by decreasing property prices and lower mortgage interest rates. In short, if consumers have the equity or available funding it appears to be a good time to buy residential investment property” Ms Holcroft said.
“Overall the market has continued to soften, but at a slowing rate on those levels experienced in mid 2008. Lower interest rates have been slow to stimulate market activity, a pattern usually observed. This is attributable to a decrease in confidence in the employment market and rising food and fuel prices. We expect this pattern to continue for the next quarter” said Ms Holcroft.
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CHRISTCHURCH
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 Waimakariri
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-7.1%
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$310,683
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Southwest
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-8.9%
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$324,962
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Selwyn
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-8.0%
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$360,820
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East |
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-8.6%
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$279,214
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Central & North
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-8.5%
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$410,849
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Hills
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-9.1%
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$448,679
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Banks Peninsula
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-12.5%
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*$388,333
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New Zealand
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-8.3%
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$382,762
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Annual Property Value Change
Average Sales Price
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QV’s January statistics for the residential property market report a 8.3% decline in national property values over the past year (calculated using the QV index over the three months ending January 2009 in comparison to the same period last year), down further from the 7.4% decline reported last month. The average New Zealand sale price for January increased slightly to $382,762. Average sale prices have declined less over the past year (2%) than the QV index, as averages can be biased by the mix of properties selling at that time.
“The signs of a slight recovery in property values we saw at the end of 2008 have not continued into 2009, with the market dipping further. The number of properties selling remains at low levels which is also typical of activity around the holiday period” said Blue Hancock of QV Valuations.
“Declining interest rates would normally stimulate buyer activity, but concerns over job security, and a more cautious approach to lending by financial institutions seems to be preventing this. Many buyers also appear to be holding back in expectation of further property value and interest rates drops throughout 2009” said Hancock.
“Home affordability has definitely improved and there are good opportunities in the current market for those who can afford it, with motivated vendors and decreasing interest rates. We are also seeing more investors returning to the market, seeing better returns from cash flow in the current property market than returns from other forms of investment” said Hancock.
Most of the main centres are once again showing further declines in value compared to 12 months ago. The Auckland area has slipped back to -9.0%, Hamilton to -10.0%, and the Wellington area to -8.5%. Both Christchurch -8.8% and Dunedin -8.3% have also declined further. Tauranga was the only main centre to not decline further, remaining flat at -9.0% compared to last year.
As has been the case for several months, the provincial centres are showing variability. While all areas have values less than 12 months ago, Wanganui ( 4.5%), Nelson (-7.2%) and Queenstown Lakes (-8.5%) have all improved slightly over the last month. Invercargill remains static at -9.1%, while Whangarei ( 10%), Rotorua ( 11.9%), Gisborne (-10.6%), Napier (-9.1%), New Plymouth ( 5.5%) and Palmerston North (-10.2%) have all declined further.
Regards
Deon
February 12 2009 | The Market | No Comments »
This is an excert from QV in their montly reports.
2008 has been a pivotal year for the NZ property market with a sustained drop in property values for the first time since 1998. QV’s December Residential Price Movement report shows property values fell by 7.4% during the year.
“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%. 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” said Mark Dow of QV Valuations.
“To keep 2008 in perspective it’s useful to look back at the activity of the past two decades. Property values grew by 120% between 2002 and mid 2007. By way of comparison, the last period of sustained growth occurred between late 1992 and the end of 1997 when property values increased by 54%” said Dow. “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.”
“It’s also interesting to look at the types of properties selling at the different stages of the property cycle. Between 2000 and 2003 the number of house sales more than doubled, with a dramatic increase in the proportion of lower value property selling. In the years 2004 to 2007, the number of house sales remained fairly steady, as did the proportion of low, medium and high value sales. During 2008, the number of house sales fell dramatically and the proportion of lower value properties selling significantly decreased. This pattern reflects the wider drivers of the property cycle. 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″ said Dow.
Our December report showed a 7.4% decline over the past year (calculated over the three months ending December 2008 in comparison to the same period last year) while the average New Zealand sale price for December increased slightly to $378,605.
All the main centres showed further declines in property values. In the Auckland Area values dropped back to -8.0% from the -7.4% reported in November. Hamilton values fell to -9.3% from -8.5%, Tauranga to -9.0% from -8.4%, and the Wellington Area to -6.9% from the -6.0%. Christchurch and Dunedin followed the same trend dropping to 8.0% and -7.7% respectively.
Most of the main provincial cities followed the national trend with property values easing further. Whangarei dropped 8.6%, Napier 8.1%, Nelson 7.6%, and Invercargill 9.1%. However, a number of areas bucked the trend most notably popular summer destinations like Queenstown whose property values dropped to 10.6% from the -12.5% reported in November, and Gisborne to 5.8% from 9.6% last month.
What’s happening in Christchurch?
I dont need to go on any further from this brilliant report that sums up 2008 in a very very good way. The bottom line is if you are selling you need to realise that your house is worth less than it was 1 to 2 years ago. Its a shame but it had to happen. Property prices got to high and you will not see them increase again till a few factors are measured and fixed. These been income levels coming up so that debt can be serviced on mortgage payments and also not until household debt falls.
This year will not be an easy one.
January 15 2009 | The Market | No Comments »
Today QV (Quotable Value) released their November Data on the New Zealand housing market and it’s fair to say that these statistics will have a few in this industry a little happier, but I feel the need to think is there more to it. QV have said this:
QV’s November statistics for the residential property market report a 6.8% decline in national property values over the past year (calculated over the three months ending November 2008 in comparison to the same period last year), the same level of decline as reported in October. The average New Zealand sale price for November dropped slightly to $375,408.
“This month is the first time since August 2007 that the annual change in property values has not dropped further than reported the previous month. Although this appears positive, it is still too soon to say that the market is recovering” said Blue Hancock of QV Valuations.
“While interest rates continue to fall sharply tighter lending criteria may be dampening any immediate impact on the property market. The strength of the Christmas retail season will be a good indicator of public sentiment and how hard the recession is hitting. Many businesses are currently feeling the pinch, and uncertainty over job security will be a major factor in whether people buy or sell property” said Hancock.
“Looking back we can now see that the market peaked in late 2007 then remained flat for six months. Most of the 6.8% decline in annual values occurred during the winter months and we may be seeing signs of a slight spring recovery. House values are now at the same level as March 2007, and remain higher for most people who purchased prior to that” said Hancock.
Most of the main centres are also showing some positive signs. In the Auckland area, property values are down 7.4% compared to the same time last year, which is a slight recovery from the 7.7% decline reported last month. Hamilton City also recovered slightly to -8.5% from -9.0%, the Wellington area rose slightly to 6.0% from -6.1%, Christchurch to -7.4% from -7.8%, and Dunedin to 7.6% from 8.2%. Tauranga was the only main centre to decline further to 8.4% from 7.9%.
The change in values remains variable in the main provincial centres. Whangarei ( 8.0%), Gisborne (-9.6%), Hastings ( 4.5%), New Plymouth ( 6.0%), and Palmerston North ( 9.0%) have all decreased less than reported last month. Rotorua ( 10.3%), Napier (-5.9%), Wanganui (-6.8%), Nelson (-6.2%), Queenstown Lakes (-12.5%) and Invercargill (-7.7%) all declined further.
So what do you think. This is my opinion. I believe we are still to see the true effects of the credit crunch. I don’t think that property prices are necessarily going to drop too much further but I do believe there may be more forced sales and some very motivated vendors with tight credit problems. This will give the buyer out there an opportunity to buy a property for what probably would be considered a good price. I see this trend continuing well into 2009. By maybe the middle of 2009 we might see more activity when the wholesale finance market levels out and debts recovered to a point where banks and lenders can lend credit again on sensible terms.
At the end of the day if you have your property on the market at a price which is reflective of all the surrounding conditions we face today you shouldn’t face to many hurdles when it comes to the business end of selling your home.
December 09 2008 | Sellers and The Market | No Comments »
QV’s October statistics for the residential property market report a 6.8% decline in national property values over the past year (calculated over the three months ending October 2008 in comparison to the same period last year), down on the 5.8% decline reported in September. The average New Zealand sale price for October remained steady at $379,290.
“Property values have declined further in most parts of the country. Activity levels remain unusually low, especially considering that spring usually brings an upsurge in the number of house sales. Poor weather across most of the country, plus the school holidays, probably contributed to this” said Blue Hancock of QV Valuations.
“There appears to be uncertainty in the market, with many buyers and sellers waiting to see any impact from the financial crisis, dropping interest rates and the election before committing to property transactions” said Hancock.
Most of the main centres are showing further slight declines in property values. Across the Auckland area property values are down 7.7% compared to the same time last year, declining slightly from the -7.0% reported last month. Hamilton City’s values have also dipped slightly further to -9.0%, Tauranga to -7.9%, the Wellington area to -6.1% and Christchurch to -7.8%. Dunedin improved slightly to -8.2% compared to the -8.5% reported last month.
There is more variability in the change in property values across the main provincial centres. Whangarei (-8.5%), Rotorua (-9.4%), New Plymouth (-8.1%), Queenstown Lakes (-8.1%) and Invercargill (-4.6%) have all declined further. Wanganui (-6.0%), Palmerston North (-9.5%) and Nelson (-4.9%) also declined further, but only slightly. The year on year change in Gisborne remains unchanged at -10.1%, while Napier ( 4.3%) and Hastings (-5.0%) have both recovered slightly.
What’s happening in Taranaki/Taupo/Wanganui?
What does this all mean?
Well from my view the propert market is tough. Buyers are definately holding back from buying as many have been waiting to see what happens with the economy and the elections. This years general elections were held on Saturday just been and the country voted in a change government which saw National taking a comanding position in the polls. This generally has had a positive spin on the property market looking back in history. But we also have to take into account the present state of the economy not just here but all over the world.
There are good things coming out of this though. Property prices have come back coming back on from a massive increase over the previous 7 years which saw values multiply by 3 or 4 times. But now with the easing of prices this makes property just that little more affordable for the average person to buy – especially firts time buyers.
There are other factors that come into play which to me are going to have a positive spin on the housing market in New Zealand. These things are the interest rates dropping. The OCR has dropped 1.75% this year and is set to fall even more – although mortgage interest rates may stay steady for longer as the costs to the banks for borrowing overseas is still high. Fuel prices are coming down. Crude oil is the lowest its been for 3 years which has seen our petrol prices fall by 30%. Although they could be alot less our NZ Dollar is also low which has ofset some of this. But exporters are now making more money from the drop in the dollar which will stimulate our economy but there is also less demand for many products around the world as the global economy slows down.
Food prices are still high but in the last few weeks the price of milk and dairy products has dropped by 5% which is a direct saving at home. All these things are now letting families have a little more money in their back pockets. On top of all this we have seen the first round of tax cuts from the outgoing Labour Party and the National Party is promising more within the next 6 months. Thats great news for everyone.
I feel that the property market has still got a fair drop to go. Signals point to a smoothing out of the property market but we are not immune to whats happening around the world. We are not out of the dark yet. It will be some time yet before full confidence is returned to the market but if you are in a position of selling and want to move on this is as good a time as any to do it. Because what you have to remember is the capital loss you may have experienced in the last year have been felt all over and when it comes to re buying you will be buying for a less value. This is a time when you make your own destiny and many people are doing well. Its all about how you approach things and the motivated and forward thinkers are making the most of it. Sellers need to be realistic and price according to where the market is in your area. If you dont its a waist of time and money.
If you seriously need to move realise this and act accordinly. There is no point in holding out for a dream price as you may be waiting for a number of years. As an agent I dont like to see people losing but all you need to do is look at the statistics. Look at my recent sales catalogue and other things and this will compare and reassure you of whatis happening. The only thing anyone can hope for is to achieve a fair market price. And thats in any market.
November 10 2008 | The Market | 3 Comments »
QV’s September statistics for the residential property market report a 5.8% decline in national property values over the past year (calculated over the three months ending September 2008 in comparison to the same period last year), down on the 4.5% decline reported in August. The average New Zealand sale price for September was $379,854.
“Indications last month that a more optimistic mood had come over the market have since evaporated” said Mark Dow of QV Valuations. “We are moving into an economic recession and there is plenty of speculation that things will get worse before they get better. Uncertainty about the impact of the global credit crisis, the usual lack of activity prior to an election, and significant tightening of lending policies by the banks is contributing to pessimism in the property market and there is little expectation of any spring resurgence. The requirement to have a significant deposit will take many first home buyers and investors out of the market, reducing demand and putting further downward pressure on prices” said Dow.
Across the Auckland area property values are down 7.0% compared to the same time last year, declining further from the -5.8% reported last month. Hamilton City’s values have slipped slightly to -8.8% and Tauranga to -7.6%. The Wellington area has also declined further to -5.4%, Christchurch to -7.1% and Dunedin to -8.5%.
Most of the main provincial North Island centres are showing further declines in year on year value compared to those reported last month. Whangarei has declined further to -6.6%, Rotorua -6.4%, Napier -4.4%, Hastings -7.0%, New Plymouth -7.0%, Wanganui -5.5%, and Palmerston North -9.4%. Gisborne is the only centre to improve slightly to -10.1% compared to the -10.4% reported last month. In the South Island, Nelson dropped further to -4.0%, Queenstown Lakes to -5.3%, and Invercargill to -1.6%.
What’s happening in Taranaki/Taupo/Wanganui?
The property market in from my perspective is rather interesting and by no means dull. I however am seeing many people sitting on the fence and waiting to see what happens due to current world events. We all know whats happeing in the economic world. The credit crunch, House Prices Falling, Finance companies going under, Banks Closing, Sharemarket drops, Government Bailouts, It all sounds scarey doesnt it. And the reality of the matter is it is. The world is in a tight situation financially and is likely to be for some time. But this doesnt mean that the world is ending.
My best and honest advise if your selling or buying property at the moment use an agent. I am seeing alot of the agents I work with going over and above the call of duty now to work and help people get deals done. They are making sure everything is in order before a deal closes and are following the process to the end. Its fairly tough out there for everybody but we are all in the same boat. Talk to your agents, they are right in the thick of the property market and if they are informed and are good agents I have no doubt they will provide you the best advise for your unique situation what ever that may be. But make sure you look at all your options. When you know all your options it will make the whole process alot easier. Noone likes seeing someone in a tight financial situation. We are here to help.
October 13 2008 | The Market | 4 Comments »
