QV: Small centres catch property market slowdown
People holding back from listing their properties may be protecting New Zealand from a significant fall in house prices, QV says.
It has released its latest data, which shows nationwide residential property values were up 4.3 per cent in September on the same time the year before. Prices were up 1.1 per cent over the past three months.
Spokesman David Nagel said a drop in value growth had spread from the main centres to almost all urban areas, with the exception of Rotorua, Palmerston North, Dunedin and Invercargill.
"The year-on-year growth is still showing double-digit gains in many of New Zealand's provincial towns; however the quarterly change shows a gradual slowing of the property market in almost all city locations," he said.
"Values are reflecting small decreases in all but a few isolated pockets of Auckland while Tauranga and Christchurch have also shown a small decline over the past quarter."
He said there had not been the normal "spring surge" of people listing their properties for sale, which had avoided a sharper fall in values. If there was more supply on the market, there would be less competition, which could weaken prices further.
In Auckland, values are down 0.6 per cent over the past three months.
QV senior consultant James Steele said sales volumes were at very low levels because it was hard for purchasers to get finance.
"The number of listings has also eased as there is little pressure at the moment for homeowners to sell, as rents remain high and interest rates low, and a number of vendors and purchasers are taking a 'wait and see' approach until after a new government is formed."
Those who had to sell were having to be more flexible, and realistic about their pricing, he said.
He said there was strong demand from first-home buyers who faced less competition from investors and less often had to deal with properties going to auction.
"Prices for new dwellings in large subdivisions have eased back, especially where speculation was a large part of the market, and builders have also noted a slowdown of work in these areas."
Napier had the biggest year-on-year price gains but Hawke's Bay valuers said the market seemed to have changed there, too, while the outcome of the election was unclear.
Hamilton valuers also reported fewer investors in the market and more hesitation from buyers and sellers.
In Wellington, prices are up almost 10 per cent year on year and senior consultant David Cornford said while growth had flattened over the quarter, it was still a seller's market.
"There is strong competition for well-presented, well-located properties and multi-offers are the norm with these properties and there is a strong presence from first home buyers in the market."
Christchurch prices are still flat, down just under 1 per cent compared to the year before. QV said it was a reflection of the difficulty in buying and selling due to lending restrictions, especially for investors.
QV said the unclear election result was probably still causing market uncertainty across the country.
"While there is uncertainty around who will govern the country in the coming weeks, there are policies that if agreed up on under a coalition government could influence the property market," Nagel said.
"These include a gradual reduction on immigration numbers which has previously helped fuel the property market, particularly in Auckland and the increase in housing supply."