Property values on the rise

Property values have gone up 5.6 per cent in Palmerston North, compared with the same time last year.

The latest QV residential property indices for January were released yesterday, and the figures show city properties are increasing in value at a faster rate than many other centres. Nationally, the average property value increase was 4.4 per cent for January 2010 compared with January 2009.

But national values haven't yet recovered from the booming market in 2007 – they are still 4.3 per cent below that peak.

Manawatu real estate principal John van Lienen said he'd noticed more confidence in Manawatu's property market last month, compared with January 2009.

"We had higher volume of property for sale in '09, and less confidence about selling and buying.

"Palmerston North's market is a bit unusual, active in December, January and February, as people relocate here for the new tertiary year." He had seen good sales in the middle to upper market in Manawatu, the $450,000 to $750,000 priced homes, from this transferring worker market.

Quotable Value's Glenda Whitehead said that nationally, sales had been patchy, with activity lower than expected. Most centres experienced a dip in demand over Christmas, with things picking up in late January, to head into what was usually the strongest period for house sales – February and March. "This January (in many centres) the expected increases seems to be absent."

She cited uncertainty about tax changes, increasing unemployment and indecision about housing loan interest rates as reasons for buyers and sellers hesitating.

Mr van Lienen said that sector of the market was also tentative in Palmerston North, but he thought the market would soon adjust if a capital gains tax was introduced.

"The Australian experience shows us that. When the Australians introduced their capital gains tax there was a bit of a fuss, then they found people just adjusted prices accordingly."

Quotable Value said that nationally, values in most of the main centres had continued to increase in recent months and were now all above the same time last year. Values in the Auckland region were now 7.3 per cent up, the Wellington area is 5.7 per cent up, and Christchurch 6.3 per cent up. Values in the other main centres had fluctuated in recent months, but still remained above last year by 3.5 per cent in Hamilton, 0.6 per cent in Tauranga, and 5.0 per cent in Dunedin.

- © Fairfax NZ News